DCF Studio

    ALFA.ST · STO · Industrials

    Alfa Laval AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 338.55

    Market price

    SEK 545.80

    Implied upside

    -38.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    SEK 338.55-38.0%
    Exit multiple
    SEK 644.07+18.0%
    Market price
    SEK 545.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn6bn12bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 76.7bnSEK 84.5bnSEK 93.1bnSEK 102.6bnSEK 113.0bn+10.1%
    EBITSEK 11.4bnSEK 12.5bnSEK 13.8bnSEK 15.2bnSEK 16.7bn+10.1%
    NOPATSEK 8.5bnSEK 9.4bnSEK 10.4bnSEK 11.4bnSEK 12.6bn+10.1%
    Add depreciation & amortisationSEK 3.0bnSEK 3.3bnSEK 3.7bnSEK 4.0bnSEK 4.5bn+10.1%
    Less capital expenditureSEK -3.1bnSEK -3.4bnSEK -3.8bnSEK -4.2bnSEK -4.6bn+10.1%
    Less increase in working capitalSEK -159.8mSEK -176.0mSEK -193.9mSEK -213.5mSEK -235.2m+10.1%
    Free cashflow to firmSEK 8.3bnSEK 9.1bnSEK 10.1bnSEK 11.1bnSEK 12.2bn+10.1%
    Discount factor0.95700.87640.80260.73510.6732-
    Present valueSEK 7.9bnSEK 8.0bnSEK 8.1bnSEK 8.1bnSEK 8.2bn+0.9%
    Present Value Of The ForecastSEK 40.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.855Reported 0.783, pulled toward 1.0 (Blume)
    Cost of equity9.75%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 225.6bn91.5% of capital
    Total debtSEK 21.0bn8.5% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC9.19%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareSEK 338.55

    74% of EV

    Forecast FCFF, final year
    SEK 12.2bn
    Capex at depreciation, working capital in reinvestment
    SEK 13.3bn
    Less reinvestment at g/ROIC (17.8% of NOPAT)
    SEK -2.4bn
    Capitalised
    SEK 10.9bn
    ROIC (reported)
    14.1%
    Terminal value, undiscounted
    SEK 167.5bn
    Terminal value, discounted
    SEK 112.8bn
    Enterprise value
    SEK 153.1bn
    Less net debt
    SEK 13.2bn
    Equity value
    SEK 139.9bn

    Exit at 16.8x EBITDA

    Value per shareSEK 644.07

    86% of EV

    Terminal value, undiscounted
    SEK 355.1bn
    Terminal value, discounted
    SEK 239.0bn
    Enterprise value
    SEK 279.4bn
    Less net debt
    SEK 13.2bn
    Equity value
    SEK 266.2bn

    Spread between methods: 62%.

    Sensitivity

    Value per share (SEK) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.19%445.37467.09493.26525.47566.18
    8.19%373.91387.03402.32420.41442.17
    9.19%321.06329.25338.55349.23361.64
    10.19%280.40285.58291.34297.79305.11
    11.19%248.15251.42254.98258.88263.21

    Outlined: this model. Green text: above today's price of 545.80. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year10.1%21.6%+11.4pp
    EBIT margin14.8%23.4%+8.6pp
    Discount rate9.2%6.8%-2.4pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.