If you’re wondering if PPL is still a sensible buy at today’s price, or if the easy money has already been made, you’re not alone. The valuation story is more nuanced than the headline numbers suggest.
Shares have gained 0.9% over the past week, are up 6.6% year-to-date and 9.2% year-to-date, while long-term holders have seen total returns of around 28.7% and 54.6% over 3 and 5 years, respectively.
The moves came as investors refocus on regulated utilities with stable cash flows and as the market reassess interest rate expectations, which tend to weigh on how defensive names like PPL are valued. At the same time, ongoing plans to upgrade the network and investments in decarbonization have kept the company in the conversation among investors focused on revenue and infrastructure.
Despite this background, PPL scores just 1 out of 6 on our undervaluation checks, suggesting that the market may already be pricing in much of what is currently known. Next, we’ll walk through several valuation approaches and then finish with a more holistic way of thinking about the true value of PPL.
PPL is only 1/6 on our rating checks. See what other red flags we found in our full assessment breakdown.
A discounted cash flow model estimates what a business is worth today by taking expected future cash flows and then discounting them back to current dollars. For PPL, the 2-stage Free Cash Flow to Equity model starts from the company’s trailing 12-month free cash flow of about $433 million in the red, reflecting heavy investments and near-term cash strain rather than mature, steady-state profits.
Analysts forecast a sharp improvement in cash generation, with free cash flow expected to reach about $1.49 billion by 2028, and Simply Wall St extrapolates this to about $758 million in 2035 as growth slows. All of these projections are expressed in dollars and are adjusted back to present value to estimate what the entire future cash flow is worth today.
On this basis, the DCF model arrives at an intrinsic value of about $27.34 per share, suggesting that PPL is overvalued by about 25.4% from its current price.
Result: Overrated
Our discounted cash flow (DCF) analysis suggests that PPL may be overvalued by 25.4%. Discover 910 undervalued stocks or create your own screener to find better value opportunities.
PPL’s discounted cash flow in December 2025
Go to the Valuation section of our Company Report for more details on how we arrive at this fair value for PPL.
For a profitable utility like PPL, the price-to-earnings ratio is a useful metric because it ties what investors are paying directly to the company’s current earnings strength. In general, faster growth and lower risk warrant a higher PE, while slower growth or higher risk should translate to a lower, more conservative multiple.
PPL currently trades at approximately 23.27x earnings, which is above the electric utility industry average of approximately 19.42x and also higher than its peer group average of approximately 14.78x. At first glance, this premium might suggest that the stock is a little hot compared to its sector and its closest comparables.
Simply Wall St’s Fair Ratio is designed to go one step further. It estimates what a reasonable PE should be once factors such as expected earnings growth, profitability, risk profile, industry and market capitalization are considered. For PPL, this fair ratio comes out to about 24.16x, only slightly above the current 23.27x. That means the market is generally in line with what those fundamentals would justify, rather than dramatically mispricing the stock.
Result: ABOUT LAW
NYSE:PPL PE Ratio Dec 2025
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We mentioned earlier that there’s an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on the Simply Wall St community page that allows you to attach a clear story to your numbers. It does this by connecting your vision of PPL’s future revenues, earnings and margins with a financial forecast, fair value and ultimately a buy or sell decision that automatically updates as new news arrives or earnings. For example, an investor might build a bullish PPL narrative around accelerating data center-driven load growth, 4 to 5% annual earnings, mid-to-high-teens margins, and a fair value near the top of current targets of around $42. A more cautious investor might craft a conservative narrative that assumes slower new project adoption, only low single-digit revenue growth, more modest margin improvement and a fair value closer to $34. Each investor can then compare the evolving fair value to today’s share price to decide whether PPL looks attractively, fairly, or expensively priced based on the story they truly believe.
Do you think there is more to the story for PPL? Go to our community to see what others are saying!
NYSE:PPL 1 Year Stock Price Chart
This article from Simply Wall St is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We aim to provide you with focused long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality materials. Simply Wall St has no position in any of the stocks mentioned.
Companies discussed in this article include PPL.
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