Published on 14 Feb 2024 on Simply Wall St. via Yahoo Finance
Severn Trent PLC (LON:SVT) Shares Could Be 24% Below Their Intrinsic Value Estimate
Key Insights
The projected fair value for Severn Trent is UK£32.80 based on 2 Stage Free Cash Flow to EquityCurrent share price of UK£24.95 suggests Severn Trent is potentially 24% undervalued The UK£27.06 analyst price target for SVT is 18% less than our estimate of fair value
Today we will run through one way of estimating the intrinsic value of Severn Trent PLC (LON:SVT) by taking the forecast future cash flows of the company and discounting them back to today's value. This will be done using the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example!