ICG has quietly built a solid three year share price record, which puts fresh focus on whether the current £19.00 level lines up with the returns it earns on its capital. With that kind of history in the rear-view mirror, investors now have to ask how much of those returns are already reflected in the valuation.
- ICG has delivered a 55.5% share price gain over the past 3 years, which raises the stakes on whether its underlying return on capital can support that kind of rerating.
- The move by wealth manager ICG next to Osaic, involving about $2.3b in client assets, highlights how capital flows and partnership choices across the broader ICG ecosystem can influence expectations for how efficiently the group can deploy and compound its own capital base.
- What if you looked at ICG through its earnings instead? See what ICG's 10.8x P/E says about the price.
For investors, the debate is whether ICG's current share price is properly aligned with the returns it earns on the capital it puts to work.
If you are weighing whether ICG's £19.00 share price fairly reflects the returns it earns on capital, it can help to line that up against other 15 high quality undervalued stocks
Does ICG Look Undervalued on Excess Returns?
The Excess Returns model looks at how much profit ICG can earn above its equity cost and what that implies for long term value. For ICG, the inputs suggest a business that analysts expect to keep generating returns on its equity base that sit comfortably above the charge shareholders require.
Book value is set at £9.53 per share and rises to a stable book value assumption of £11.08, while stable EPS is £2.00 per share based on estimates from 8 analysts. Against a cost of equity of £0.98 per share, that leaves an excess return of £1.02 per share, which pairs with an average return on equity of 18.06%. Those levels help explain why the Excess Returns model points to an intrinsic value substantially above the current £19.00 share price. Because the Osaic deal brings another £2.3b of client assets into the wider ICG orbit, the market may still be underpricing how those excess returns could be sustained by a broader platform. Find out what ICG could be worth using our Excess Returns estimate.
The ICG Narrative: What Would Justify Today's Price?
Simply Wall St Narratives pick up where this valuation puzzle on ICG leaves off and spell out which assumptions on growth, margins and earnings would need to hold for the shares to be worth materially more or less than today's price, on the Community page. Rather than focusing on a single multiple or model output, each narrative explains the key drivers behind its view of fair value so you can later compare those inputs with the results ICG actually delivers.
One of the top community narratives on ICG: roughly fairly valued
"This narrative explores a more pessimistic perspective on ICG compared to the consensus, based on a Fair Value that aligns with the bearish cohort..."
Discover why this Narrative puts ICG at roughly fairly valued.
One more angle on ICG that could change how you see the whole story
Valuation only covers one side of ICG, and the research has also flagged specific risk checks that investors often weigh just as carefully as upside potential. Take a closer look at 1 warning sign before settling on a valuation.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com