DCF Studio

    BMED.MI · MIL · Financial Services

    Banca Mediolanum S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR 36.38

    Market price

    EUR 23.27

    Implied upside

    +56.3%

    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.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedCapital expenditure runs at 2.8% of revenue against depreciation of 0.0%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 36.38+56.3%
    Exit multiple
    EUR 41.28+77.4%
    Market price
    EUR 23.27

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 2.9bnEUR 3.5bnEUR 4.2bnEUR 5.1bnEUR 6.1bn+20.0%
    EBITEUR 1.6bnEUR 1.9bnEUR 2.3bnEUR 2.8bnEUR 3.3bn+20.0%
    NOPATEUR 1.3bnEUR 1.5bnEUR 1.8bnEUR 2.2bnEUR 2.6bn+20.0%
    Add depreciation & amortisationEUR 0.00EUR 0.00EUR 0.00EUR 0.00EUR 0.00-
    Less capital expenditureEUR -81.0mEUR -97.2mEUR -116.7mEUR -140.1mEUR -168.2m+20.0%
    Less increase in working capitalEUR -489.1mEUR -587.1mEUR -704.8mEUR -846.1mEUR -1.0bn+20.0%
    Free cashflow to firmEUR 684.8mEUR 822.0mEUR 986.8mEUR 1.2bnEUR 1.4bn+20.0%
    Discount factor0.95560.87260.79680.72760.6644-
    Present valueEUR 654.4mEUR 717.3mEUR 786.3mEUR 861.9mEUR 944.8m+9.6%
    Present Value Of The ForecastEUR 4.0bn

    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
    Beta0.833Reported 0.751, pulled toward 1.0 (Blume)
    Cost of equity9.62%Risk-free + beta x equity risk premium
    Cost of debt6.20%Implied cost of debt of 93.9% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationEUR 17.2bn97.8% of capital
    Total debtEUR 388.8m2.2% of capital, book value as a proxy
    Tax rate22.1%Effective, capped at statutory
    WACC9.51%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 36.38

    85% of EV

    Forecast FCFF, final year
    EUR 1.4bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.6bn
    Less reinvestment at g/ROIC (11.1% of NOPAT)
    EUR -288.5m
    Capitalised
    EUR 2.3bn
    ROIC (reported)
    22.6%
    Terminal value, undiscounted
    EUR 33.9bn
    Terminal value, discounted
    EUR 22.5bn
    Enterprise value
    EUR 26.5bn
    Less net debt
    EUR -417.9m
    Equity value
    EUR 26.9bn

    Exit at 11.8x EBITDA

    Value per shareEUR 41.28

    87% of EV

    Terminal value, undiscounted
    EUR 39.3bn
    Terminal value, discounted
    EUR 26.1bn
    Enterprise value
    EUR 30.1bn
    Less net debt
    EUR -417.9m
    Equity value
    EUR 30.5bn

    Spread between methods: 13%.

    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%
    7.51%46.3249.1352.5056.5961.70
    8.51%39.0640.9243.0845.6348.67
    9.51%33.6334.9236.3838.0640.01
    10.51%29.4430.3631.3832.5433.85
    11.51%26.1126.7827.5228.3329.25

    Outlined: this model. Green text: above today's price of 23.27. 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 year20.0%7.2%-12.8pp
    EBIT margin55.0%37.1%-17.9pp
    Discount rate9.5%13.0%+3.4pp
    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.