DCF Studio

    BAS.DE · GER · Basic Materials

    BASF SE

    Also onConsensus Drift

    Implied value per share

    EUR 5.78

    Market price

    EUR 51.62

    Implied upside

    -88.8%

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

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

    Value Per Share

    Perpetuity growth
    EUR 5.78-88.8%
    Exit multiple
    EUR 18.18-64.8%
    Market price
    EUR 51.62

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 52.5bnEUR 46.3bnEUR 40.8bnEUR 35.9bnEUR 31.6bn-11.9%
    EBITEUR 3.0bnEUR 2.6bnEUR 2.3bnEUR 2.0bnEUR 1.8bn-11.9%
    NOPATEUR 2.1bnEUR 1.8bnEUR 1.6bnEUR 1.4bnEUR 1.3bn-11.9%
    Add depreciation & amortisationEUR 3.5bnEUR 3.1bnEUR 2.7bnEUR 2.4bnEUR 2.1bn-11.9%
    Less capital expenditureEUR -4.0bnEUR -3.5bnEUR -3.1bnEUR -2.7bnEUR -2.4bn-11.9%
    Less increase in working capitalEUR 965.2mEUR 850.0mEUR 748.6mEUR 659.3mEUR 580.7m+11.9%
    Free cashflow to firmEUR 2.6bnEUR 2.3bnEUR 2.0bnEUR 1.8bnEUR 1.6bn-11.9%
    Discount factor0.97140.91650.86470.81590.7698-
    Present valueEUR 2.5bnEUR 2.1bnEUR 1.7bnEUR 1.4bnEUR 1.2bn-16.9%
    Present Value Of The ForecastEUR 9.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.832Reported 0.749, pulled toward 1.0 (Blume)
    Cost of equity7.59%Risk-free + beta x equity risk premium
    Cost of debt4.16%Interest expense / average total debt
    Market capitalisationEUR 44.4bn65.7% of capital
    Total debtEUR 23.2bn34.3% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC5.99%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 5.78

    65% of EV

    Forecast FCFF, final year
    EUR 1.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.3bn
    Less reinvestment at g/ROIC (41.8% of NOPAT)
    EUR -526.4m
    Capitalised
    EUR 734.0m
    ROIC (WACC floor)
    6.0%
    Terminal value, undiscounted
    EUR 21.6bn
    Terminal value, discounted
    EUR 16.6bn
    Enterprise value
    EUR 25.6bn
    Less net debt
    EUR 20.4bn
    Equity value
    EUR 5.2bn

    Exit at 9.2x EBITDA

    Value per shareEUR 18.18

    75% of EV

    Terminal value, undiscounted
    EUR 36.0bn
    Terminal value, discounted
    EUR 27.7bn
    Enterprise value
    EUR 36.7bn
    Less net debt
    EUR 20.4bn
    Equity value
    EUR 16.3bn

    Spread between methods: 104%.

    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%
    3.99%17.7217.8718.0218.1718.32
    4.99%10.4610.5710.6810.8010.91
    5.99%5.605.695.785.875.96
    6.99%2.112.182.262.332.41
    7.99%-0.52-0.45-0.39-0.33-0.27

    Outlined: this model. Green text: above today's price of 51.62. 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 year-11.9%14.3%+26.2pp
    EBIT margin5.7%15.5%+9.8pp
    Discount rate6.0%3.2%-2.8pp
    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.