DCF Studio

    BMPS.MI · MIL · Financial Services

    Banca Monte dei Paschi di Siena S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR -8.99

    Market price

    EUR 11.76

    Implied upside

    -176.4%

    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.
    AdjustedReported capital expenditure averages 2.20% of revenue against depreciation of 5.34%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 5.34% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 39.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    EUR -8.99-176.4%
    Exit multiple
    EUR 4.24-63.9%
    Market price
    EUR 11.76

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m207m415mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 5.8bnEUR 6.6bnEUR 7.6bnEUR 8.7bnEUR 10.0bn+15.0%
    EBITEUR 1.3bnEUR 1.5bnEUR 1.7bnEUR 2.0bnEUR 2.3bn+15.0%
    NOPATEUR 986.0mEUR 1.1bnEUR 1.3bnEUR 1.5bnEUR 1.7bn+15.0%
    Add depreciation & amortisationEUR 306.8mEUR 352.7mEUR 405.5mEUR 466.2mEUR 535.9m+15.0%
    Less capital expenditureEUR -306.8mEUR -352.7mEUR -405.5mEUR -466.2mEUR -535.9m+15.0%
    Less increase in working capitalEUR -748.5mEUR -860.4mEUR -989.2mEUR -1.1bnEUR -1.3bn+15.0%
    Free cashflow to firmEUR 237.5mEUR 273.1mEUR 313.9mEUR 360.9mEUR 414.9m+15.0%
    Discount factor0.96620.90190.84190.78590.7336-
    Present valueEUR 229.5mEUR 246.3mEUR 264.3mEUR 283.6mEUR 304.4m+7.3%
    Present Value Of The ForecastEUR 1.3bn

    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
    Beta0.954Reported 0.932, pulled toward 1.0 (Blume)
    Cost of equity10.40%Risk-free + beta x equity risk premium
    Cost of debt6.48%Interest expense / average total debt
    Market capitalisationEUR 35.7bn40.8% of capital
    Total debtEUR 51.8bn59.2% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC7.13%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 -8.99

    93% of EV

    Forecast FCFF, final year
    EUR 414.9m
    Capex at depreciation, working capital in reinvestment
    EUR 1.7bn
    Less reinvestment at g/ROIC (35.1% of NOPAT)
    EUR -604.3m
    Capitalised
    EUR 1.1bn
    ROIC (WACC floor)
    7.1%
    Terminal value, undiscounted
    EUR 24.8bn
    Terminal value, discounted
    EUR 18.2bn
    Enterprise value
    EUR 19.5bn
    Less net debt
    EUR 35.4bn
    Equity value
    EUR -15.9bn

    Exit at 20.0x EBITDA

    Value per shareEUR 4.24

    97% of EV

    Terminal value, undiscounted
    EUR 56.6bn
    Terminal value, discounted
    EUR 41.6bn
    Enterprise value
    EUR 42.9bn
    Less net debt
    EUR 35.4bn
    Equity value
    EUR 7.5bn

    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%
    5.13%-3.82-3.75-3.67-3.60-3.52
    6.13%-6.90-6.84-6.78-6.72-6.66
    7.13%-9.09-9.04-8.99-8.94-8.89
    8.13%-10.73-10.69-10.64-10.60-10.56
    9.13%-11.99-11.96-11.92-11.89-11.85

    Outlined: this model. Green text: above today's price of 11.76. 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 year15.0%50.2%+35.2pp
    EBIT margin22.9%58.3%+35.4pp
    Discount rate7.1%3.7%-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.