DCF Studio

    EPI-A.ST · STO · Industrials

    Epiroc AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 111.34

    Market price

    SEK 252.10

    Implied upside

    -55.8%

    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.

    Current EV/EBITDA of 20.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    SEK 111.34-55.8%
    Exit multiple
    SEK 263.58+4.6%
    Market price
    SEK 252.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn7bn15bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 66.7bnSEK 71.9bnSEK 77.3bnSEK 83.3bnSEK 89.6bn+7.7%
    EBITSEK 13.8bnSEK 14.8bnSEK 15.9bnSEK 17.2bnSEK 18.5bn+7.7%
    NOPATSEK 10.6bnSEK 11.4bnSEK 12.3bnSEK 13.2bnSEK 14.2bn+7.7%
    Add depreciation & amortisationSEK 3.1bnSEK 3.3bnSEK 3.5bnSEK 3.8bnSEK 4.1bn+7.7%
    Less capital expenditureSEK -1.8bnSEK -2.0bnSEK -2.1bnSEK -2.3bnSEK -2.5bn+7.7%
    Less increase in working capitalSEK -835.1mSEK -899.0mSEK -967.8mSEK -1.0bnSEK -1.1bn+7.7%
    Free cashflow to firmSEK 11.0bnSEK 11.8bnSEK 12.7bnSEK 13.7bnSEK 14.7bn+7.7%
    Discount factor0.94840.85320.76750.69040.6210-
    Present valueSEK 10.4bnSEK 10.1bnSEK 9.8bnSEK 9.5bnSEK 9.2bn-3.2%
    Present Value Of The ForecastSEK 48.9bn

    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
    Beta1.153Reported 1.228, pulled toward 1.0 (Blume)
    Cost of equity11.69%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 305.0bn93.8% of capital
    Total debtSEK 20.2bn6.2% of capital, book value as a proxy
    Tax rate23.1%Effective, capped at statutory
    WACC11.17%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 shareSEK 111.34

    66% of EV

    Forecast FCFF, final year
    SEK 14.7bn
    Capex at depreciation, working capital in reinvestment
    SEK 15.2bn
    Less reinvestment at g/ROIC (13.7% of NOPAT)
    SEK -2.1bn
    Capitalised
    SEK 13.1bn
    ROIC (reported)
    18.2%
    Terminal value, undiscounted
    SEK 155.2bn
    Terminal value, discounted
    SEK 96.4bn
    Enterprise value
    SEK 145.3bn
    Less net debt
    SEK 10.6bn
    Equity value
    SEK 134.6bn

    Exit at 20.0x EBITDA

    Value per shareSEK 263.58

    85% of EV

    Terminal value, undiscounted
    SEK 451.6bn
    Terminal value, discounted
    SEK 280.5bn
    Enterprise value
    SEK 329.3bn
    Less net debt
    SEK 10.6bn
    Equity value
    SEK 318.7bn

    Spread between methods: 81%.

    Sensitivity

    Value per share (SEK) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.17%136.47140.88145.92151.74158.55
    10.17%119.98123.00126.38130.21134.57
    11.17%106.91109.01111.34113.93116.82
    12.17%96.2897.7899.40101.18103.14
    13.17%87.4888.5589.6990.9392.27

    Outlined: this model. Green text: above today's price of 252.10. 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 year7.7%29.5%+21.9pp
    EBIT margin20.6%46.2%+25.6pp
    Discount rate11.2%6.4%-4.8pp
    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.