DCF Studio

    CAP.PA · PAR · Technology

    Capgemini SE

    Also onConsensus Drift

    Implied value per share

    EUR 211.20

    Market price

    EUR 104.35

    Implied upside

    +102.4%

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

    AdjustedReported capital expenditure averages 1.29% of revenue against depreciation of 3.14%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 3.14% 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 211.20+102.4%
    Exit multiple
    EUR 119.81+14.8%
    Market price
    EUR 104.35

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 22.6bnEUR 22.8bnEUR 22.9bnEUR 23.1bnEUR 23.3bn+0.7%
    EBITEUR 2.6bnEUR 2.6bnEUR 2.6bnEUR 2.6bnEUR 2.7bn+0.7%
    NOPATEUR 1.9bnEUR 1.9bnEUR 1.9bnEUR 2.0bnEUR 2.0bn+0.7%
    Add depreciation & amortisationEUR 711.2mEUR 716.3mEUR 721.3mEUR 726.4mEUR 731.6m+0.7%
    Less capital expenditureEUR -711.2mEUR -716.3mEUR -721.3mEUR -726.4mEUR -731.6m+0.7%
    Less increase in working capitalEUR -96.5mEUR -97.2mEUR -97.8mEUR -98.5mEUR -99.2m+0.7%
    Free cashflow to firmEUR 1.8bnEUR 1.8bnEUR 1.8bnEUR 1.9bnEUR 1.9bn+0.7%
    Discount factor0.97160.91720.86590.81740.7717-
    Present valueEUR 1.8bnEUR 1.7bnEUR 1.6bnEUR 1.5bnEUR 1.4bn-4.9%
    Present Value Of The ForecastEUR 8.0bn

    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
    Beta0.778Reported 0.669, pulled toward 1.0 (Blume)
    Cost of equity7.87%Risk-free + beta x equity risk premium
    Cost of debt3.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 17.3bn64.7% of capital
    Total debtEUR 9.5bn35.3% of capital, book value as a proxy
    Tax rate25.8%Effective, capped at statutory
    WACC5.93%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 211.20

    82% of EV

    Forecast FCFF, final year
    EUR 1.9bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.0bn
    Less reinvestment at g/ROIC (22.1% of NOPAT)
    EUR -436.0m
    Capitalised
    EUR 1.5bn
    ROIC (reported)
    11.3%
    Terminal value, undiscounted
    EUR 45.9bn
    Terminal value, discounted
    EUR 35.5bn
    Enterprise value
    EUR 43.5bn
    Less net debt
    EUR 6.4bn
    Equity value
    EUR 37.0bn

    Exit at 7.4x EBITDA

    Value per shareEUR 119.81

    71% of EV

    Terminal value, undiscounted
    EUR 25.2bn
    Terminal value, discounted
    EUR 19.4bn
    Enterprise value
    EUR 27.4bn
    Less net debt
    EUR 6.4bn
    Equity value
    EUR 21.0bn

    Spread between methods: 55%.

    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%
    3.93%354.05422.94539.76781.921587.96
    4.93%242.72269.83307.93365.58463.30
    5.93%181.62194.58211.21233.38264.51
    6.93%143.00149.81158.07168.35181.51
    7.93%116.36120.09124.44129.61135.86

    Outlined: this model. Green text: above today's price of 104.35. 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 year0.7%-18.7%-19.4pp
    EBIT margin11.4%6.5%-4.9pp
    Discount rate5.9%8.8%+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.