DCF Studio

    CS.PA · PAR · Financial Services

    AXA SA

    Also onConsensus Drift

    Implied value per share

    EUR 260.62

    Market price

    EUR 44.73

    Implied upside

    +482.7%

    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.
    AdjustedReported capital expenditure averages just 0.45% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of -0.3%. 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: EUR assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    EUR 260.62+482.7%
    Exit multiple
    EUR 210.81+371.3%
    Market price
    EUR 44.73

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn12bn23bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 115.6bnEUR 126.2bnEUR 137.7bnEUR 150.3bnEUR 164.1bn+9.1%
    EBITEUR 10.4bnEUR 11.3bnEUR 12.3bnEUR 13.5bnEUR 14.7bn+9.1%
    NOPATEUR 8.0bnEUR 8.8bnEUR 9.6bnEUR 10.5bnEUR 11.4bn+9.1%
    Add depreciation & amortisationEUR -338.7mEUR -369.7mEUR -403.5mEUR -440.4mEUR -480.7m-9.1%
    Less capital expenditureEUR -1.2bnEUR -1.3bnEUR -1.4bnEUR -1.5bnEUR -1.6bn+9.1%
    Less increase in working capitalEUR 9.7bnEUR 10.6bnEUR 11.5bnEUR 12.6bnEUR 13.8bn-9.1%
    Free cashflow to firmEUR 16.2bnEUR 17.7bnEUR 19.3bnEUR 21.1bnEUR 23.1bn+9.1%
    Discount factor0.97340.92230.87390.82800.7845-
    Present valueEUR 15.8bnEUR 16.3bnEUR 16.9bnEUR 17.5bnEUR 18.1bn+3.4%
    Present Value Of The ForecastEUR 84.6bn

    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
    Beta0.719Reported 0.581, pulled toward 1.0 (Blume)
    Cost of equity7.52%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 93.5bn60.7% of capital
    Total debtEUR 60.5bn39.3% of capital, book value as a proxy
    Tax rate22.3%Effective, capped at statutory
    WACC5.54%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 260.62

    69% of EV

    Forecast FCFF, final year
    EUR 23.1bn
    Capex at depreciation, working capital in reinvestment
    EUR 11.8bn
    Less reinvestment at g/ROIC (38.8% of NOPAT)
    EUR -4.6bn
    Capitalised
    EUR 7.2bn
    ROIC (reported)
    6.4%
    Terminal value, undiscounted
    EUR 244.2bn
    Terminal value, discounted
    EUR 191.6bn
    Enterprise value
    EUR 276.2bn
    Less net debt
    EUR -259.5bn
    Equity value
    EUR 535.7bn

    Exit at 8.0x EBITDA

    Value per shareEUR 210.81

    51% of EV

    Terminal value, undiscounted
    EUR 113.7bn
    Terminal value, discounted
    EUR 89.2bn
    Enterprise value
    EUR 173.8bn
    Less net debt
    EUR -259.5bn
    Equity value
    EUR 433.3bn

    Spread between methods: 21%.

    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%
    3.54%357.41394.33466.36670.975918.10
    4.54%289.20298.99313.40336.93382.72
    5.54%254.48257.17260.62265.30272.10
    6.54%233.62233.95234.29234.62234.95
    7.54%221.37221.65221.92222.20222.47

    Outlined: this model. Green text: above today's price of 44.73. 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
    EBIT margin9.0%-44.9%-53.9pp
    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.