DCF Studio

    BAMI.MI · MIL · Financial Services

    Banco BPM S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR 16.26

    Market price

    EUR 15.70

    Implied upside

    +3.6%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 16.26+3.6%
    Exit multiple
    EUR 26.65+69.7%
    Market price
    EUR 15.70

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 7.5bnEUR 8.4bnEUR 9.4bnEUR 10.5bnEUR 11.8bn+12.2%
    EBITEUR 2.5bnEUR 2.8bnEUR 3.1bnEUR 3.5bnEUR 4.0bn+12.2%
    NOPATEUR 1.9bnEUR 2.1bnEUR 2.4bnEUR 2.6bnEUR 3.0bn+12.2%
    Add depreciation & amortisationEUR 392.0mEUR 440.0mEUR 493.9mEUR 554.3mEUR 622.2m+12.2%
    Less capital expenditureEUR -405.7mEUR -455.4mEUR -511.2mEUR -573.7mEUR -644.0m+12.2%
    Less increase in working capitalEUR 812.8mEUR 912.4mEUR 1.0bnEUR 1.1bnEUR 1.3bn-12.2%
    Free cashflow to firmEUR 2.7bnEUR 3.0bnEUR 3.4bnEUR 3.8bnEUR 4.2bn+12.2%
    Discount factor0.96590.90110.84070.78440.7318-
    Present valueEUR 2.6bnEUR 2.7bnEUR 2.8bnEUR 3.0bnEUR 3.1bn+4.7%
    Present Value Of The ForecastEUR 14.2bn

    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
    Beta0.658Reported 0.490, pulled toward 1.0 (Blume)
    Cost of equity8.48%Risk-free + beta x equity risk premium
    Cost of debt8.16%Interest expense / average total debt
    Market capitalisationEUR 23.6bn45.2% of capital
    Total debtEUR 28.7bn54.8% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC7.19%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 shareEUR 16.26

    69% of EV

    Forecast FCFF, final year
    EUR 4.2bn
    Capex at depreciation, working capital in reinvestment
    EUR 3.0bn
    Less reinvestment at g/ROIC (34.8% of NOPAT)
    EUR -1.1bn
    Capitalised
    EUR 2.0bn
    ROIC (WACC floor)
    7.2%
    Terminal value, undiscounted
    EUR 43.1bn
    Terminal value, discounted
    EUR 31.6bn
    Enterprise value
    EUR 45.7bn
    Less net debt
    EUR 21.3bn
    Equity value
    EUR 24.5bn

    Exit at 14.1x EBITDA

    Value per shareEUR 26.65

    77% of EV

    Terminal value, undiscounted
    EUR 64.5bn
    Terminal value, discounted
    EUR 47.2bn
    Enterprise value
    EUR 61.3bn
    Less net debt
    EUR 21.3bn
    Equity value
    EUR 40.1bn

    Spread between methods: 48%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.19%27.1027.2627.4127.5627.72
    6.19%20.6920.8220.9421.0721.19
    7.19%16.0616.1616.2616.3716.47
    8.19%12.5512.6412.7212.8112.89
    9.19%9.809.879.9410.0210.09

    Outlined: this model. Green text: above today's price of 15.70. 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 year12.2%11.8%-0.4pp
    EBIT margin33.5%32.8%-0.7pp
    Discount rate7.2%7.3%+0.1pp
    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.