DCF Studio

    DTE.DE · GER · Communication Services

    Deutsche Telekom AG

    Also onConsensus Drift

    Implied value per share

    EUR 119.86

    Market price

    EUR 27.11

    Implied upside

    +342.1%

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

    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 119.86+342.1%
    Exit multiple
    EUR 38.07+40.4%
    Market price
    EUR 27.11

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn11bn23bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 120.0bnEUR 121.6bnEUR 123.3bnEUR 125.0bnEUR 126.7bn+1.4%
    EBITEUR 22.2bnEUR 22.5bnEUR 22.8bnEUR 23.1bnEUR 23.5bn+1.4%
    NOPATEUR 17.0bnEUR 17.3bnEUR 17.5bnEUR 17.8bnEUR 18.0bn+1.4%
    Add depreciation & amortisationEUR 26.1bnEUR 26.5bnEUR 26.8bnEUR 27.2bnEUR 27.6bn+1.4%
    Less capital expenditureEUR -21.1bnEUR -21.3bnEUR -21.6bnEUR -21.9bnEUR -22.2bn+1.4%
    Less increase in working capitalEUR -730.9mEUR -741.0mEUR -751.1mEUR -761.4mEUR -771.8m+1.4%
    Free cashflow to firmEUR 21.4bnEUR 21.7bnEUR 21.9bnEUR 22.3bnEUR 22.6bn+1.4%
    Discount factor0.97750.93400.89250.85280.8149-
    Present valueEUR 20.9bnEUR 20.2bnEUR 19.6bnEUR 19.0bnEUR 18.4bn-3.1%
    Present Value Of The ForecastEUR 98.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.548Reported 0.325, pulled toward 1.0 (Blume)
    Cost of equity5.89%Risk-free + beta x equity risk premium
    Cost of debt4.58%Interest expense / average total debt
    Market capitalisationEUR 129.7bn48.0% of capital
    Total debtEUR 140.5bn52.0% of capital, book value as a proxy
    Tax rate23.3%Effective, capped at statutory
    WACC4.65%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 119.86

    86% of EV

    Forecast FCFF, final year
    EUR 22.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 20.8bn
    Less reinvestment at g/ROIC (23.2% of NOPAT)
    EUR -4.8bn
    Capitalised
    EUR 16.0bn
    ROIC (reported)
    10.8%
    Terminal value, undiscounted
    EUR 759.4bn
    Terminal value, discounted
    EUR 618.8bn
    Enterprise value
    EUR 716.9bn
    Less net debt
    EUR 133.0bn
    Equity value
    EUR 583.9bn

    Exit at 5.3x EBITDA

    Value per shareEUR 38.07

    69% of EV

    Terminal value, undiscounted
    EUR 270.4bn
    Terminal value, discounted
    EUR 220.4bn
    Enterprise value
    EUR 318.4bn
    Less net debt
    EUR 133.0bn
    Equity value
    EUR 185.4bn

    Spread between methods: 104%.

    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%
    2.65%280.82475.061923.75——
    3.65%140.55175.59240.83405.461633.16
    4.65%89.15101.64119.87149.00203.23
    5.65%62.4468.1075.5085.64100.40
    6.65%46.0648.9252.4356.8662.65

    Outlined: this model. Green text: above today's price of 27.11. 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 year1.4%-20.9%-22.2pp
    EBIT margin18.5%4.9%-13.6pp
    Discount rate4.7%8.9%+4.2pp
    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.