Paragon Banking Group PLC

LSE:PAG Stock Report

Market Cap: UK£1.5b

Paragon Banking Group Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • 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 PAG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PAG (£7.24) is trading below our estimate of fair value (£17.76)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for PAG. This is calculated by dividing PAG's market cap by their current earnings.
What is PAG's PE Ratio?
PE Ratio7.4x
EarningsUK£197.90m
Market CapUK£1.46b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for PAG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average15x
OSB OSB Group
3.7x-3.8%UK£1.4b
NBS Nationwide Building Society
0.9xn/aUK£1.2b
MAB1 Mortgage Advice Bureau (Holdings)
31.4x26.4%UK£337.3m
IHP IntegraFin Holdings
24x9.5%UK£1.3b
PAG Paragon Banking Group
7.4x0.07%UK£1.5b

Price-To-Earnings vs Peers: PAG is good value based on its Price-To-Earnings Ratio (7.4x) compared to the peer average (15x).

Price to Earnings Ratio vs Industry

How does PAG's PE Ratio compare vs other companies in the GB Diversified Financial Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
NBS Nationwide Building Society
0.9xn/aUS$1.52b
No more companies available in this PE range
PAG 7.4xIndustry Avg. 14.3xNo. of Companies4PE01224364860+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: PAG is good value based on its Price-To-Earnings Ratio (7.4x) compared to the UK Diversified Financial industry average (14.2x).

Price to Earnings Ratio vs Fair Ratio

What is PAG'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.

PAG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.4x
Fair PE Ratio14x

Price-To-Earnings vs Fair Ratio: PAG is good value based on its Price-To-Earnings Ratio (7.4x) compared to the estimated Fair Price-To-Earnings Ratio (14x).

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 PAG forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£7.24
UK£8.53
+17.9%
9.3%UK£9.70UK£6.40n/a11
Nov ’25UK£6.91
UK£8.74
+26.5%
5.2%UK£9.70UK£8.00n/a9
Oct ’25UK£7.73
UK£8.74
+13.1%
5.2%UK£9.70UK£8.00n/a9
Sep ’25UK£7.68
UK£8.74
+13.8%
5.2%UK£9.70UK£8.00n/a9
Aug ’25UK£7.90
UK£8.74
+10.6%
5.2%UK£9.70UK£8.00n/a9
Jul ’25UK£7.36
UK£8.51
+15.7%
10.0%UK£9.70UK£6.40n/a10
Jun ’25UK£7.65
UK£7.81
+2.1%
10.0%UK£8.75UK£6.40n/a10
May ’25UK£7.10
UK£7.75
+9.2%
12.2%UK£9.25UK£6.05n/a10
Apr ’25UK£6.91
UK£7.75
+12.3%
12.2%UK£9.25UK£6.05n/a10
Mar ’25UK£6.66
UK£7.65
+14.9%
11.8%UK£9.25UK£6.05n/a12
Feb ’25UK£6.50
UK£7.46
+14.7%
13.4%UK£9.25UK£5.40n/a12
Jan ’25UK£6.98
UK£7.32
+4.9%
13.9%UK£9.25UK£5.40n/a12
Dec ’24UK£4.85
UK£6.83
+40.9%
13.0%UK£8.00UK£4.70n/a12
Nov ’24UK£4.47
UK£7.03
+57.3%
9.2%UK£8.00UK£5.60UK£6.9111
Oct ’24UK£4.92
UK£7.07
+43.8%
8.7%UK£8.00UK£5.60UK£7.7311
Sep ’24UK£5.23
UK£7.07
+35.4%
8.7%UK£8.00UK£5.60UK£7.6811
Aug ’24UK£5.18
UK£7.04
+35.8%
9.0%UK£8.00UK£5.60UK£7.9010
Jul ’24UK£5.31
UK£7.02
+32.3%
8.6%UK£8.00UK£5.60UK£7.3611
Jun ’24UK£4.88
UK£6.85
+40.4%
8.0%UK£7.65UK£5.40UK£7.6511
May ’24UK£5.03
UK£6.85
+36.3%
8.0%UK£7.65UK£5.40UK£7.1011
Apr ’24UK£5.20
UK£6.84
+31.6%
7.7%UK£7.65UK£5.40UK£6.9112
Mar ’24UK£6.00
UK£6.84
+14.1%
7.7%UK£7.65UK£5.40UK£6.6612
Feb ’24UK£6.08
UK£6.84
+12.5%
7.7%UK£7.65UK£5.40UK£6.5012
Jan ’24UK£5.64
UK£6.74
+19.6%
6.1%UK£7.35UK£5.60UK£6.9812
Dec ’23UK£4.64
UK£6.37
+37.2%
13.6%UK£7.10UK£4.25UK£4.8511
Nov ’23UK£4.28
UK£6.37
+48.7%
13.6%UK£7.10UK£4.25UK£4.4711

Analyst Forecast: Target price is less than 20% higher than the current share price.

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