DCF Studio

    BNP.PA · PAR · Financial Services

    BNP Paribas SA

    Also onConsensus Drift

    Implied value per share

    EUR 191.27

    Market price

    EUR 100.74

    Implied upside

    +89.9%

    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 3.88% of revenue against depreciation of 11.11%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 11.11% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 191.27+89.9%
    Exit multiple
    EUR 128.98+28.0%
    Market price
    EUR 100.74

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn5bn10bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 73.1bnEUR 77.6bnEUR 82.4bnEUR 87.5bnEUR 92.9bn+6.2%
    EBITEUR 16.8bnEUR 17.8bnEUR 18.9bnEUR 20.1bnEUR 21.4bn+6.2%
    NOPATEUR 12.5bnEUR 13.2bnEUR 14.1bnEUR 14.9bnEUR 15.8bn+6.2%
    Add depreciation & amortisationEUR 8.1bnEUR 8.6bnEUR 9.2bnEUR 9.7bnEUR 10.3bn+6.2%
    Less capital expenditureEUR -8.1bnEUR -8.6bnEUR -9.2bnEUR -9.7bnEUR -10.3bn+6.2%
    Less increase in working capitalEUR -4.3bnEUR -4.5bnEUR -4.8bnEUR -5.1bnEUR -5.4bn+6.2%
    Free cashflow to firmEUR 8.2bnEUR 8.7bnEUR 9.3bnEUR 9.8bnEUR 10.4bn+6.2%
    Discount factor0.97570.92880.88420.84170.8012-
    Present valueEUR 8.0bnEUR 8.1bnEUR 8.2bnEUR 8.3bnEUR 8.4bn+1.1%
    Present Value Of The ForecastEUR 41.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta1.023Reported 1.035, pulled toward 1.0 (Blume)
    Cost of equity9.34%Risk-free + beta x equity risk premium
    Cost of debt5.20%Implied cost of debt of 12.9% 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 110.4bn21.7% of capital
    Total debtEUR 398.5bn78.3% of capital, book value as a proxy
    Tax rate25.8%Effective, capped at statutory
    WACC5.05%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 191.27

    86% of EV

    Forecast FCFF, final year
    EUR 10.4bn
    Capex at depreciation, working capital in reinvestment
    EUR 15.8bn
    Less reinvestment at g/ROIC (49.5% of NOPAT)
    EUR -7.8bn
    Capitalised
    EUR 8.0bn
    ROIC (WACC floor)
    5.0%
    Terminal value, undiscounted
    EUR 321.8bn
    Terminal value, discounted
    EUR 257.8bn
    Enterprise value
    EUR 298.8bn
    Less net debt
    EUR 71.5bn
    Equity value
    EUR 227.2bn

    Exit at 7.2x EBITDA

    Value per shareEUR 128.98

    82% of EV

    Terminal value, undiscounted
    EUR 229.4bn
    Terminal value, discounted
    EUR 183.8bn
    Enterprise value
    EUR 224.8bn
    Less net debt
    EUR 71.5bn
    Equity value
    EUR 153.2bn

    Spread between methods: 39%.

    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%
    3.05%364.05365.96367.872486.89—
    4.05%254.87256.25257.63259.01260.38
    5.05%189.15190.21191.27192.33193.39
    6.05%145.32146.17147.02147.86148.71
    7.05%114.06114.76115.45116.15116.85

    Outlined: this model. Green text: above today's price of 100.74. 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 year6.2%-7.5%-13.6pp
    EBIT margin23.0%15.3%-7.7pp
    Discount rate5.0%7.6%+2.6pp
    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.