Published on 25 Aug 2023 on Simply Wall St. via Yahoo Finance
Is There An Opportunity With Severn Trent PLC's (LON:SVT) 35% Undervaluation?
Key Insights
The projected fair value for Severn Trent is UK£36.35 based on 2 Stage Free Cash Flow to EquityCurrent share price of UK£23.74 suggests Severn Trent is potentially 35% undervaluedOur fair value estimate is 32% higher than Severn Trent's analyst price target of UK£27.45
Does the August share price for Severn Trent PLC (LON:SVT) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by projecting its future cash flows and then discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.