As of May 27, 2025, Schroders PLC's estimated intrinsic value ranges from $225.17 to $698.14 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $264.54 | -22.4% |
| Discounted Cash Flow (5Y) | $252.52 | -25.9% |
| Dividend Discount Model (Multi-Stage) | $225.17 | -34.0% |
| Dividend Discount Model (Stable) | $237.53 | -30.3% |
| Earnings Power Value | $698.14 | +104.7% |
Is Schroders PLC (SDR.L) undervalued or overvalued?
With the current market price at $341.00, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Schroders 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 | 1.19 | 1.45 |
| Cost of equity | 11.1% | 15.1% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 18.0% | 19.2% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 7.6% | 9.6% |
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 | $253 | $5,268M | 74.1% |
| 10-Year Growth | $265 | $5,457M | 56.9% |
| 5-Year EBITDA | $254 | $5,295M | 74.3% |
| 10-Year EBITDA | $264 | $5,456M | 56.8% |
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 | $1,044M |
| Discount Rate (WACC) | 9.6% - 7.6% |
| Enterprise Value | $10,878M - $13,696M |
| Net Debt | $1,290M |
| Equity Value | $9,587M - $12,406M |
| Outstanding Shares | 16M |
| Fair Value | $609 - $788 |
| Selected Fair Value | $698.14 |
| Metric | Value |
|---|---|
| Market Capitalization | $5371M |
| Enterprise Value | $6662M |
| Trailing P/E | 12.88 |
| Forward P/E | 13.34 |
| Trailing EV/EBITDA | 11.15 |
| Current Dividend Yield | 635.05% |
| Dividend Growth Rate (5Y) | 2.27% |
| Debt-to-Equity Ratio | 1.00 |
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% | $79.36 |
| Discounted Cash Flow (5Y) | 25% | $63.13 |
| Dividend Discount Model (Multi-Stage) | 20% | $45.03 |
| Dividend Discount Model (Stable) | 15% | $35.63 |
| Earnings Power Value | 10% | $69.81 |
| Weighted Average | 100% | $292.97 |
Based on our comprehensive valuation analysis, Schroders PLC's weighted average intrinsic value is $292.97, which is approximately 14.1% below the current market price of $341.00.
Key investment considerations:
Given these factors, we believe Schroders PLC is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.