DCF Studio

    FME.DE · GER · Healthcare

    Fresenius Medical Care AG

    Also onConsensus Drift

    Implied value per share

    EUR 49.86

    Market price

    EUR 38.69

    Implied upside

    +28.9%

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

    AdjustedReported capital expenditure averages 3.88% of revenue against depreciation of 8.78%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 8.78% 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 49.86+28.9%
    Exit multiple
    EUR 40.38+4.4%
    Market price
    EUR 38.69

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 19.7bnEUR 19.8bnEUR 19.9bnEUR 19.9bnEUR 20.0bn+0.4%
    EBITEUR 1.6bnEUR 1.6bnEUR 1.6bnEUR 1.6bnEUR 1.6bn+0.4%
    NOPATEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.2bn+0.4%
    Add depreciation & amortisationEUR 1.7bnEUR 1.7bnEUR 1.7bnEUR 1.8bnEUR 1.8bn+0.4%
    Less capital expenditureEUR -1.7bnEUR -1.7bnEUR -1.7bnEUR -1.8bnEUR -1.8bn+0.4%
    Less increase in working capitalEUR 36.6mEUR 36.7mEUR 36.8mEUR 37.0mEUR 37.1m-0.4%
    Free cashflow to firmEUR 1.2bnEUR 1.2bnEUR 1.2bnEUR 1.2bnEUR 1.2bn+0.4%
    Discount factor0.97510.92730.88170.83840.7973-
    Present valueEUR 1.1bnEUR 1.1bnEUR 1.0bnEUR 995.2mEUR 950.0m-4.5%
    Present Value Of The ForecastEUR 5.2bn

    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
    Beta0.885Reported 0.828, pulled toward 1.0 (Blume)
    Cost of equity7.91%Risk-free + beta x equity risk premium
    Cost of debt3.53%Interest expense / average total debt
    Market capitalisationEUR 10.3bn48.8% of capital
    Total debtEUR 10.8bn51.2% of capital, book value as a proxy
    Tax rate27.9%Effective, capped at statutory
    WACC5.16%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 49.86

    78% of EV

    Forecast FCFF, final year
    EUR 1.2bn
    Capex at depreciation, working capital in reinvestment
    EUR 1.2bn
    Less reinvestment at g/ROIC (48.4% of NOPAT)
    EUR -558.9m
    Capitalised
    EUR 595.6m
    ROIC (WACC floor)
    5.2%
    Terminal value, undiscounted
    EUR 22.9bn
    Terminal value, discounted
    EUR 18.3bn
    Enterprise value
    EUR 23.5bn
    Less net debt
    EUR 9.0bn
    Equity value
    EUR 14.5bn

    Exit at 5.8x EBITDA

    Value per shareEUR 40.38

    75% of EV

    Terminal value, undiscounted
    EUR 19.5bn
    Terminal value, discounted
    EUR 15.5bn
    Enterprise value
    EUR 20.7bn
    Less net debt
    EUR 9.0bn
    Equity value
    EUR 11.8bn

    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%
    3.16%134.41167.81250.97838.78—
    4.16%75.1280.1688.03102.38137.82
    5.16%49.2549.5549.8650.1650.47
    6.16%36.5936.8437.0937.3337.58
    7.16%27.4727.6727.8828.0828.28

    Outlined: this model. Green text: above today's price of 38.69. 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 year0.4%-1.9%-2.3pp
    EBIT margin8.0%6.9%-1.1pp
    Discount rate5.2%6.0%+0.9pp
    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.