As of May 25, 2025, Weir Group PLC's estimated intrinsic value ranges from $977.31 to $1407.12 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $1407.12 | -39.8% |
| Discounted Cash Flow (5Y) | $1304.21 | -44.2% |
| Dividend Discount Model (Multi-Stage) | $977.31 | -58.2% |
| Dividend Discount Model (Stable) | $1199.63 | -48.6% |
| Earnings Power Value | $1164.62 | -50.1% |
Is Weir Group PLC (WEIR.L) undervalued or overvalued?
With the current market price at $2336.00, 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 Weir 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 | 1.08 | 1.14 |
| Cost of equity | 10.5% | 12.9% |
| Cost of debt | 4.0% | 5.1% |
| Tax rate | 22.3% | 25.4% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 9.4% | 11.5% |
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 | $1,304 | $3,989M | 69.7% |
| 10-Year Growth | $1,407 | $4,261M | 49.5% |
| 5-Year EBITDA | $1,371 | $4,167M | 71.0% |
| 10-Year EBITDA | $1,402 | $4,248M | 49.3% |
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 | $374M |
| Discount Rate (WACC) | 11.5% - 9.4% |
| Enterprise Value | $3,239M - $3,999M |
| Net Debt | $535M |
| Equity Value | $2,705M - $3,464M |
| Outstanding Shares | 3M |
| Fair Value | $1,021 - $1,308 |
| Selected Fair Value | $1164.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $6187M |
| Enterprise Value | $6721M |
| Trailing P/E | 19.82 |
| Forward P/E | 21.83 |
| Trailing EV/EBITDA | 8.45 |
| Current Dividend Yield | 161.31% |
| Dividend Growth Rate (5Y) | -3.90% |
| Debt-to-Equity Ratio | 0.18 |
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% | $422.14 |
| Discounted Cash Flow (5Y) | 25% | $326.05 |
| Dividend Discount Model (Multi-Stage) | 20% | $195.46 |
| Dividend Discount Model (Stable) | 15% | $179.94 |
| Earnings Power Value | 10% | $116.46 |
| Weighted Average | 100% | $1240.06 |
Based on our comprehensive valuation analysis, Weir Group PLC's weighted average intrinsic value is $1240.06, which is approximately 46.9% below the current market price of $2336.00.
Key investment considerations:
Given these factors, we believe Weir Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.