As of May 25, 2025, TP ICAP Group PLC's estimated intrinsic value ranges from $219.82 to $484.69 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $403.63 | +56.1% |
| Discounted Cash Flow (5Y) | $350.99 | +35.8% |
| Dividend Discount Model (Multi-Stage) | $219.82 | -15.0% |
| Dividend Discount Model (Stable) | $263.97 | +2.1% |
| Earnings Power Value | $484.69 | +87.5% |
Is TP ICAP Group PLC (TCAP.L) undervalued or overvalued?
With the current market price at $258.50, the stock appears to be significantly 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 TP ICAP Group 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 | 0.73 | 0.79 |
| Cost of equity | 8.3% | 10.5% |
| Cost of debt | 5.5% | 5.5% |
| Tax rate | 35.1% | 39.0% |
| Debt/Equity ratio | 0.49 | 0.49 |
| After-tax WACC | 6.8% | 8.2% |
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 | $351 | $2,596M | 78.1% |
| 10-Year Growth | $404 | $3,000M | 62.7% |
| 5-Year EBITDA | $284 | $2,086M | 72.7% |
| 10-Year EBITDA | $337 | $2,489M | 55.0% |
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 | $268M |
| Discount Rate (WACC) | 8.2% - 6.8% |
| Enterprise Value | $3,282M - $3,960M |
| Net Debt | $(94)M |
| Equity Value | $3,376M - $4,054M |
| Outstanding Shares | 8M |
| Fair Value | $440 - $529 |
| Selected Fair Value | $484.69 |
| Metric | Value |
|---|---|
| Market Capitalization | $1981M |
| Enterprise Value | $1887M |
| Trailing P/E | 11.86 |
| Forward P/E | 14.10 |
| Trailing EV/EBITDA | 6.40 |
| Current Dividend Yield | 580.41% |
| Dividend Growth Rate (5Y) | 5.17% |
| Debt-to-Equity Ratio | 0.49 |
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% | $121.09 |
| Discounted Cash Flow (5Y) | 25% | $87.75 |
| Dividend Discount Model (Multi-Stage) | 20% | $43.96 |
| Dividend Discount Model (Stable) | 15% | $39.60 |
| Earnings Power Value | 10% | $48.47 |
| Weighted Average | 100% | $340.87 |
Based on our comprehensive valuation analysis, TP ICAP Group PLC's weighted average intrinsic value is $340.87, which is approximately 31.9% above the current market price of $258.50.
Key investment considerations:
Given these factors, we believe TP ICAP Group PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.