As of July 16, 2025, DS Smith PLC's estimated intrinsic value ranges from $340.00 to $504.20 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $504.20 | -13.4% |
| Discounted Cash Flow (5Y) | $501.24 | -13.9% |
| Dividend Discount Model (Multi-Stage) | $346.35 | -40.5% |
| Dividend Discount Model (Stable) | $352.99 | -39.4% |
| Earnings Power Value | $340.00 | -41.6% |
Is DS Smith PLC (SMDS.L) undervalued or overvalued?
With the current market price at $582.50, the stock appears to be significantly 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 DS Smith 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 | 0.66 | 0.82 |
| Cost of equity | 7.9% | 10.7% |
| Cost of debt | 4.0% | 4.9% |
| Tax rate | 22.6% | 24.3% |
| Debt/Equity ratio | 0.34 | 0.34 |
| After-tax WACC | 6.7% | 8.9% |
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 | $501 | $9,243M | 73.8% |
| 10-Year Growth | $504 | $9,284M | 55.3% |
| 5-Year EBITDA | $388 | $7,669M | 68.4% |
| 10-Year EBITDA | $423 | $8,157M | 49.1% |
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 | $535M |
| Discount Rate (WACC) | 8.9% - 6.7% |
| Enterprise Value | $5,993M - $8,004M |
| Net Debt | $2,266M |
| Equity Value | $3,727M - $5,738M |
| Outstanding Shares | 14M |
| Fair Value | $268 - $412 |
| Selected Fair Value | $340.00 |
| Metric | Value |
|---|---|
| Market Capitalization | $8108M |
| Enterprise Value | $10374M |
| Trailing P/E | 21.06 |
| Forward P/E | 20.05 |
| Trailing EV/EBITDA | 6.35 |
| Current Dividend Yield | 304.64% |
| Dividend Growth Rate (5Y) | 2.70% |
| Debt-to-Equity Ratio | 0.34 |
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% | $151.26 |
| Discounted Cash Flow (5Y) | 25% | $125.31 |
| Dividend Discount Model (Multi-Stage) | 20% | $69.27 |
| Dividend Discount Model (Stable) | 15% | $52.95 |
| Earnings Power Value | 10% | $34.00 |
| Weighted Average | 100% | $432.79 |
Based on our comprehensive valuation analysis, DS Smith PLC's intrinsic value is $432.79, which is approximately 25.7% below the current market price of $582.50.
Key investment considerations:
Given these factors, we believe DS Smith PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.