What is STAN.L's Intrinsic value?

Standard Chartered PLC (STAN.L) Intrinsic Value Analysis

Executive Summary

As of July 2, 2025, Standard Chartered PLC's estimated intrinsic value ranges from $673.20 to $1385.85 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $673.20 -43.0%
Dividend Discount Model (Stable) $1385.85 +17.2%

Is Standard Chartered PLC (STAN.L) undervalued or overvalued?

With the current market price at $1182.00, the stock appears to be moderately overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Standard Chartered PLC's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

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 1.47 1.68
Cost of equity 12.8% 16.7%
Cost of debt 5.0% 5.0%
Tax rate 32.2% 32.5%
Debt/Equity ratio 3.78 3.78
After-tax WACC 5.4% 6.2%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 11.5%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 14.8%
  • Long-term growth rate: 1.0%
  • Fair value: $673.20 (-43.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 16.7% (Low) to 12.8% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $1,334 to $2,469
  • Selected fair value: $1385.85 (17.2% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $25931M
Enterprise Value $88650M
Trailing P/E 5.24
Forward P/E 8.70
Trailing EV/EBITDA 0.00
Current Dividend Yield 212.57%
Dividend Growth Rate (5Y) 6.72%
Debt-to-Equity Ratio 3.78

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $134.64
Dividend Discount Model (Stable) 43% $207.88
Weighted Average 100% $978.62

Investment Conclusion

Based on our comprehensive valuation analysis, Standard Chartered PLC's weighted average intrinsic value is $978.62, which is approximately 17.2% below the current market price of $1182.00.

Key investment considerations:

  • Historical dividend growth of 6.72%

Given these factors, we believe Standard Chartered PLC is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.