DCF Studio

    G1A.DE · GER · Industrials

    GEA Group Aktiengesellschaft

    Also onConsensus Drift

    Implied value per share

    EUR 205.72

    Market price

    EUR 64.50

    Implied upside

    +219.0%

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

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    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 205.72+219.0%
    Exit multiple
    EUR 51.62-20.0%
    Market price
    EUR 64.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m276m551mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 5.6bnEUR 5.7bnEUR 5.8bnEUR 6.0bnEUR 6.1bn+2.1%
    EBITEUR 542.2mEUR 553.5mEUR 565.1mEUR 576.9mEUR 588.9m+2.1%
    NOPATEUR 425.7mEUR 434.6mEUR 443.6mEUR 452.9mEUR 462.4m+2.1%
    Add depreciation & amortisationEUR 218.3mEUR 222.9mEUR 227.5mEUR 232.3mEUR 237.1m+2.1%
    Less capital expenditureEUR -241.4mEUR -246.5mEUR -251.6mEUR -256.9mEUR -262.3m+2.1%
    Less increase in working capitalEUR 104.8mEUR 107.0mEUR 109.2mEUR 111.5mEUR 113.8m-2.1%
    Free cashflow to firmEUR 507.3mEUR 517.9mEUR 528.8mEUR 539.8mEUR 551.1m+2.1%
    Discount factor0.98240.94820.91510.88320.8524-
    Present valueEUR 498.4mEUR 491.1mEUR 483.9mEUR 476.8mEUR 469.8m-1.5%
    Present Value Of The ForecastEUR 2.4bn

    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
    Beta0.833Reported 0.751, pulled toward 1.0 (Blume)
    Cost of equity7.60%Risk-free + beta x equity risk premium
    Cost of debt4.60%Implied cost of debt of 17.8% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationEUR 0.000.0% of capital
    Total debtEUR 247.0m100.0% of capital, book value as a proxy
    Tax rate21.5%Effective, capped at statutory
    WACC3.61%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 205.72

    93% of EV

    Forecast FCFF, final year
    EUR 551.1m
    Capex at depreciation, working capital in reinvestment
    EUR 462.4m
    Less reinvestment at g/ROIC (15.3% of NOPAT)
    EUR -71.0m
    Capitalised
    EUR 391.4m
    ROIC (reported)
    16.3%
    Terminal value, undiscounted
    EUR 36.1bn
    Terminal value, discounted
    EUR 30.8bn
    Enterprise value
    EUR 33.2bn
    Less net debt
    EUR -366.1m
    Equity value
    EUR 33.6bn

    Exit at 8.0x EBITDA

    Value per shareEUR 51.62

    70% of EV

    Terminal value, undiscounted
    EUR 6.6bn
    Terminal value, discounted
    EUR 5.6bn
    Enterprise value
    EUR 8.1bn
    Less net debt
    EUR -366.1m
    Equity value
    EUR 8.4bn

    Spread between methods: 120%.

    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%
    1.61%2196.31————
    2.61%226.72386.771980.22——
    3.61%122.55151.26205.72349.121776.78
    4.61%85.2896.03111.84137.41185.93
    5.61%66.1071.3478.2487.75101.74

    Outlined: this model. Green text: above today's price of 64.50. 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 year2.1%-15.8%-17.9pp
    EBIT margin9.7%2.9%-6.8pp
    Discount rate3.6%6.4%+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.