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Haleon plc (HLN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Haleon plc (HLN)

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Intrinsic Value (DCF)

Current$9.77
→
Intrinsic$11.36
+16%
$7.20$11.36$19.28
Market implies 16% growth for 5 years
HLN shows 16% potential upside using 20% growth — reasonable if fundamentals hold.
At $10, the market prices in continued high-teens cash flow growth (16%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $7 → Bull $19. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →16%18%20%22%
8%$14$16$17$18
10%$9$10$11$12
12%$7$8$8$9
14%$5$6$6$7

Bull Case

  • Bull case ($19) offers 97% upside at 24% growth, 9% discount
  • 14% margin of safety vs. base case estimate
  • Market-implied growth (16%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($7) implies 26% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$2.46B
Year 2$2.95B
Year 3$3.54B
Year 4$4.25B
Year 5$5.10B
Terminal$75.10B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.05BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is HLN stock undervalued or overvalued?
🟡 FAIRLY VALUED

HLN trades at $9.77, within 10% of our $11.36 intrinsic value estimate. At 10.0% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $6.86 (bear) to $18.00 (bull).

What is HLN's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.05B, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.91B net debt and dividing by 4.59B shares: Bear $6.86 | Base $11.36 | Bull $18.00. Current price $9.77 implies +11% to base case.

How is HLN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($60.04B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.