As of May 28, 2025, Shaw Communications Inc's estimated intrinsic value ranges from $36.41 to $55.75 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $51.59 | +27.5% |
| Discounted Cash Flow (5Y) | $44.78 | +10.6% |
| Dividend Discount Model (Multi-Stage) | $36.41 | -10.1% |
| Dividend Discount Model (Stable) | $38.26 | -5.5% |
| Earnings Power Value | $55.75 | +37.7% |
Is Shaw Communications Inc (SJR.B.TO) undervalued or overvalued?
With the current market price at $40.48, 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 Shaw Communications Inc'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 | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.41 | 0.46 |
| Cost of equity | 5.2% | 7.0% |
| Cost of debt | 4.4% | 5.2% |
| Tax rate | 17.9% | 22.5% |
| Debt/Equity ratio | 0.29 | 0.29 |
| After-tax WACC | 4.9% | 6.3% |
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 | $45 | $27,945M | 84.5% |
| 10-Year Growth | $52 | $31,350M | 72.3% |
| 5-Year EBITDA | $23 | $16,907M | 74.3% |
| 10-Year EBITDA | $30 | $20,802M | 58.2% |
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 | $1,836M |
| Discount Rate (WACC) | 6.3% - 4.9% |
| Enterprise Value | $29,123M - $37,730M |
| Net Debt | $5,569M |
| Equity Value | $23,554M - $32,161M |
| Outstanding Shares | 500M |
| Fair Value | $47 - $64 |
| Selected Fair Value | $55.75 |
| Metric | Value |
|---|---|
| Market Capitalization | $20227M |
| Enterprise Value | $25796M |
| Trailing P/E | 27.48 |
| Forward P/E | 23.98 |
| Trailing EV/EBITDA | 5.85 |
| Current Dividend Yield | 292.67% |
| Dividend Growth Rate (5Y) | 10.86% |
| Debt-to-Equity Ratio | 0.29 |
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% | $15.48 |
| Discounted Cash Flow (5Y) | 25% | $11.19 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.28 |
| Dividend Discount Model (Stable) | 15% | $5.74 |
| Earnings Power Value | 10% | $5.57 |
| Weighted Average | 100% | $45.27 |
Based on our comprehensive valuation analysis, Shaw Communications Inc's weighted average intrinsic value is $45.27, which is approximately 11.8% above the current market price of $40.48.
Key investment considerations:
Given these factors, we believe Shaw Communications Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.