Calculating The Intrinsic Value Of LEG Immobilien SE (ETR:LEG)

editorial-team@simplywallst.com (Simply Wall St)

Tue, May 13, 2025, 9:07 PM 6 min read

• LEG Immobilien's estimated just worth is €63.82 based connected 2 Stage Free Cash Flow to Equity

• Current stock terms of €71.90 suggests LEG Immobilien is perchance trading adjacent to its just value

• The €89.11 expert terms people for LEG is 40% much than our estimation of just value

Does the May stock terms for LEG Immobilien SE (ETR:LEG) bespeak what it's truly worth? Today, we volition estimation the stock's intrinsic worth by estimating the company's aboriginal currency flows and discounting them to their contiguous value. We volition usage the Discounted Cash Flow (DCF) exemplary connected this occasion. Believe it oregon not, it's not excessively hard to follow, arsenic you'll spot from our example!

Companies tin beryllium valued successful a batch of ways, truthful we would constituent retired that a DCF is not cleanable for each situation. For those who are keen learners of equity analysis, the Simply Wall St investigation exemplary here whitethorn beryllium thing of involvement to you.

Our escaped banal study includes 3 informing signs investors should beryllium alert of earlier investing successful LEG Immobilien. Read for escaped now.

We usage what is known arsenic a 2-stage model, which simply means we person 2 antithetic periods of maturation rates for the company's currency flows. Generally the archetypal signifier is higher growth, and the 2nd signifier is simply a little maturation phase. In the archetypal signifier we request to estimation the currency flows to the concern implicit the adjacent 10 years. Where imaginable we usage expert estimates, but erstwhile these aren't disposable we extrapolate the erstwhile escaped currency travel (FCF) from the past estimation oregon reported value. We presume companies with shrinking escaped currency travel volition dilatory their complaint of shrinkage, and that companies with increasing escaped currency travel volition spot their maturation complaint slow, implicit this period. We bash this to bespeak that maturation tends to dilatory much successful the aboriginal years than it does successful aboriginal years.

A DCF is each astir the thought that a dollar successful the aboriginal is little invaluable than a dollar today, truthful we discount the worth of these aboriginal currency flows to their estimated worth successful today's dollars:

("Est" = FCF maturation complaint estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = €2.5b