As of May 31, 2025, TR European Growth Trust PLC's estimated intrinsic value ranges from $260.88 to $1206.00 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1206.00 | +615.7% |
| Discounted Cash Flow (5Y) | $1077.94 | +539.7% |
| Dividend Discount Model (Multi-Stage) | $746.27 | +342.9% |
| Dividend Discount Model (Stable) | $809.30 | +380.3% |
| Earnings Power Value | $260.88 | +54.8% |
Is TR European Growth Trust PLC (TRG.L) undervalued or overvalued?
With the current market price at $168.50, 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 TR European Growth Trust 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 | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.91 | 0.96 |
| Cost of equity | 7.8% | 10.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 1.9% | 3.8% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 7.4% | 9.4% |
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 | $1,078 | $4,693M | 68.3% |
| 10-Year Growth | $1,206 | $5,240M | 48.8% |
| 5-Year EBITDA | $646 | $2,848M | 47.8% |
| 10-Year EBITDA | $861 | $3,768M | 28.8% |
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 | $99M |
| Discount Rate (WACC) | 9.4% - 7.4% |
| Enterprise Value | $1,057M - $1,350M |
| Net Debt | $89M |
| Equity Value | $968M - $1,261M |
| Outstanding Shares | 4M |
| Fair Value | $227 - $295 |
| Selected Fair Value | $260.88 |
| Metric | Value |
|---|---|
| Market Capitalization | $720M |
| Enterprise Value | $809M |
| Trailing P/E | 2.10 |
| Forward P/E | 2.15 |
| Trailing EV/EBITDA | 5.25 |
| Current Dividend Yield | 311.22% |
| Dividend Growth Rate (5Y) | 18.37% |
| Debt-to-Equity Ratio | 0.12 |
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% | $361.80 |
| Discounted Cash Flow (5Y) | 25% | $269.49 |
| Dividend Discount Model (Multi-Stage) | 20% | $149.25 |
| Dividend Discount Model (Stable) | 15% | $121.39 |
| Earnings Power Value | 10% | $26.09 |
| Weighted Average | 100% | $928.02 |
Based on our comprehensive valuation analysis, TR European Growth Trust PLC's weighted average intrinsic value is $928.02, which is approximately 450.8% above the current market price of $168.50.
Key investment considerations:
Given these factors, we believe TR European Growth Trust PLC is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.