DCF Studio

    ELE.MC · MCE · Utilities

    Endesa, S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 16.80

    Market price

    EUR 42.59

    Implied upside

    -60.6%

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

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

    Value Per Share

    Perpetuity growth
    EUR 16.80-60.6%
    Exit multiple
    EUR 16.46-61.4%
    Market price
    EUR 42.59

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 18.2bnEUR 15.7bnEUR 13.6bnEUR 11.7bnEUR 10.1bn-13.6%
    EBITEUR 3.4bnEUR 2.9bnEUR 2.5bnEUR 2.2bnEUR 1.9bn-13.6%
    NOPATEUR 2.6bnEUR 2.2bnEUR 1.9bnEUR 1.7bnEUR 1.4bn-13.6%
    Add depreciation & amortisationEUR 1.4bnEUR 1.2bnEUR 1.1bnEUR 910.5mEUR 787.1m-13.6%
    Less capital expenditureEUR -1.5bnEUR -1.3bnEUR -1.1bnEUR -975.9mEUR -843.7m-13.6%
    Less increase in working capitalEUR 385.3mEUR 333.1mEUR 287.9mEUR 248.9mEUR 215.2m+13.6%
    Free cashflow to firmEUR 2.8bnEUR 2.5bnEUR 2.1bnEUR 1.8bnEUR 1.6bn-13.6%
    Discount factor0.96380.89520.83150.77240.7175-
    Present valueEUR 2.7bnEUR 2.2bnEUR 1.8bnEUR 1.4bnEUR 1.1bn-19.7%
    Present Value Of The ForecastEUR 9.3bn

    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
    Beta0.707Reported 0.562, pulled toward 1.0 (Blume)
    Cost of equity8.79%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 43.3bn79.9% of capital
    Total debtEUR 10.9bn20.1% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC7.66%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 16.80

    67% of EV

    Forecast FCFF, final year
    EUR 1.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.5bn
    Less reinvestment at g/ROIC (13.9% of NOPAT)
    EUR -214.7m
    Capitalised
    EUR 1.3bn
    ROIC (reported)
    18.0%
    Terminal value, undiscounted
    EUR 26.5bn
    Terminal value, discounted
    EUR 19.0bn
    Enterprise value
    EUR 28.2bn
    Less net debt
    EUR 10.6bn
    Equity value
    EUR 17.6bn

    Exit at 9.7x EBITDA

    Value per shareEUR 16.46

    67% of EV

    Terminal value, undiscounted
    EUR 26.0bn
    Terminal value, discounted
    EUR 18.6bn
    Enterprise value
    EUR 27.9bn
    Less net debt
    EUR 10.6bn
    Equity value
    EUR 17.3bn

    Spread between methods: 2%.

    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%
    5.66%24.8127.5831.2336.2343.53
    6.66%18.7720.3422.2924.7628.00
    7.66%14.6815.6516.8018.1919.91
    8.66%11.7212.3413.0713.9214.93
    9.66%9.479.8910.3710.9211.55

    Outlined: this model. Green text: above today's price of 42.59. 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 year-13.6%1.8%+15.4pp
    EBIT margin18.8%38.4%+19.6pp
    Discount rate7.7%4.9%-2.7pp
    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.