Downer EDI Limited

ASX:DOW Stock Report

Market Cap: AU$3.9b

Downer EDI Valuation

Is DOW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DOW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DOW (A$5.72) is trading below our estimate of fair value (A$12.77)

Significantly Below Fair Value: DOW is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DOW?

Key metric: As DOW is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DOW. This is calculated by dividing DOW's market cap by their current earnings.
What is DOW's PE Ratio?
PE Ratio68.4x
EarningsAU$56.10m
Market CapAU$3.86b

Price to Earnings Ratio vs Peers

How does DOW's PE Ratio compare to its peers?

The above table shows the PE ratio for DOW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average16.7x
MAD Mader Group
22.3x15.5%AU$1.2b
SGF SG Fleet Group
10.1x7.3%AU$894.3m
BXB Brambles
22.1x7.3%AU$26.3b
SUG Sugar Terminals
12.3xn/aAU$397.8m
DOW Downer EDI
68.4x22.0%AU$3.9b

Price-To-Earnings vs Peers: DOW is expensive based on its Price-To-Earnings Ratio (68.4x) compared to the peer average (16.7x).

Price to Earnings Ratio vs Industry

How does DOW's PE Ratio compare vs other companies in the Global Commercial Services Industry?

18 CompaniesPrice / EarningsEstimated GrowthMarket Cap
DOW 68.4xIndustry Avg. 17.5xNo. of Companies80PE01224364860+
18 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DOW is expensive based on its Price-To-Earnings Ratio (68.4x) compared to the Global Commercial Services industry average (17.5x).

Price to Earnings Ratio vs Fair Ratio

What is DOW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DOW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio68.4x
Fair PE Ratio24.3x

Price-To-Earnings vs Fair Ratio: DOW is expensive based on its Price-To-Earnings Ratio (68.4x) compared to the estimated Fair Price-To-Earnings Ratio (24.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DOW forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$5.72
AU$5.55
-3.0%
5.5%AU$6.00AU$5.00n/a8
Nov ’25AU$5.51
AU$5.55
+0.7%
5.5%AU$6.00AU$5.00n/a8
Oct ’25AU$5.49
AU$5.48
-0.1%
4.6%AU$5.77AU$5.00n/a8
Sep ’25AU$5.59
AU$5.20
-7.0%
7.7%AU$5.75AU$4.55n/a9
Aug ’25AU$5.01
AU$4.86
-3.0%
6.8%AU$5.75AU$4.55n/a9
Jul ’25AU$4.68
AU$4.87
+4.1%
6.7%AU$5.75AU$4.55n/a9
Jun ’25AU$4.80
AU$4.88
+1.6%
5.7%AU$5.60AU$4.55n/a9
May ’25AU$4.67
AU$4.88
+4.4%
5.7%AU$5.60AU$4.55n/a9
Apr ’25AU$5.10
AU$4.88
-4.4%
5.7%AU$5.60AU$4.55n/a9
Mar ’25AU$5.02
AU$4.88
-2.8%
5.7%AU$5.60AU$4.55n/a9
Feb ’25AU$4.17
AU$4.45
+6.7%
10.6%AU$5.60AU$4.10n/a8
Jan ’25AU$4.40
AU$4.39
-0.1%
11.6%AU$5.60AU$3.85n/a8
Dec ’24AU$4.16
AU$4.36
+4.9%
12.4%AU$5.60AU$3.85n/a7
Nov ’24AU$3.86
AU$4.37
+13.1%
13.4%AU$5.60AU$3.85AU$5.516
Oct ’24AU$4.12
AU$4.50
+9.2%
11.7%AU$5.60AU$4.00AU$5.497
Sep ’24AU$4.26
AU$4.49
+5.3%
11.0%AU$5.60AU$4.00AU$5.598
Aug ’24AU$4.43
AU$4.55
+2.7%
10.5%AU$5.60AU$3.90AU$5.018
Jul ’24AU$4.11
AU$4.19
+2.0%
16.5%AU$5.60AU$3.30AU$4.688
Jun ’24AU$3.57
AU$4.19
+17.4%
16.5%AU$5.60AU$3.30AU$4.808
May ’24AU$3.57
AU$4.19
+17.4%
16.5%AU$5.60AU$3.30AU$4.678
Apr ’24AU$3.43
AU$4.11
+19.9%
20.3%AU$5.60AU$3.25AU$5.107
Mar ’24AU$3.18
AU$4.29
+34.9%
22.6%AU$5.60AU$3.25AU$5.027
Feb ’24AU$3.80
AU$4.74
+24.8%
13.4%AU$5.60AU$4.00AU$4.177
Jan ’24AU$3.71
AU$4.99
+34.5%
16.0%AU$6.30AU$4.00AU$4.407
Dec ’23AU$5.05
AU$5.89
+16.5%
4.6%AU$6.30AU$5.49AU$4.167
Nov ’23AU$4.56
AU$5.95
+30.5%
5.4%AU$6.40AU$5.49AU$3.867

Analyst Forecast: Target price is lower than the current share price.

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