As of May 28, 2025, J Sainsbury PLC's estimated intrinsic value ranges from $106.64 to $472.30 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $413.93 | +41.3% |
| Discounted Cash Flow (5Y) | $373.47 | +27.5% |
| Dividend Discount Model (Multi-Stage) | $232.07 | -20.8% |
| Dividend Discount Model (Stable) | $106.64 | -63.6% |
| Earnings Power Value | $472.30 | +61.2% |
Is J Sainsbury PLC (SBRY.L) undervalued or overvalued?
With the current market price at $293.00, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate J Sainsbury PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.7 | 0.83 |
| Cost of equity | 8.2% | 10.8% |
| Cost of debt | 4.7% | 7.1% |
| Tax rate | 28.4% | 34.1% |
| Debt/Equity ratio | 0.99 | 0.99 |
| After-tax WACC | 5.8% | 7.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $373 | $14,051M | 76.0% |
| 10-Year Growth | $414 | $14,980M | 58.7% |
| 5-Year EBITDA | $318 | $12,777M | 73.6% |
| 10-Year EBITDA | $369 | $13,946M | 55.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,082M |
| Discount Rate (WACC) | 7.7% - 5.8% |
| Enterprise Value | $13,965M - $18,675M |
| Net Debt | $5,475M |
| Equity Value | $8,490M - $13,200M |
| Outstanding Shares | 23M |
| Fair Value | $370 - $575 |
| Selected Fair Value | $472.30 |
| Metric | Value |
|---|---|
| Market Capitalization | $6728M |
| Enterprise Value | $12203M |
| Trailing P/E | 27.80 |
| Forward P/E | 15.30 |
| Trailing EV/EBITDA | 6.30 |
| Current Dividend Yield | 466.39% |
| Dividend Growth Rate (5Y) | 4.83% |
| Debt-to-Equity Ratio | 0.99 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $124.18 |
| Discounted Cash Flow (5Y) | 25% | $93.37 |
| Dividend Discount Model (Multi-Stage) | 20% | $46.41 |
| Dividend Discount Model (Stable) | 15% | $16.00 |
| Earnings Power Value | 10% | $47.23 |
| Weighted Average | 100% | $327.19 |
Based on our comprehensive valuation analysis, J Sainsbury PLC's weighted average intrinsic value is $327.19, which is approximately 11.7% above the current market price of $293.00.
Key investment considerations:
Given these factors, we believe J Sainsbury PLC is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.