DCF Studio

    HO.PA · PAR · Industrials

    Thales S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 405.14

    Market price

    EUR 238.20

    Implied upside

    +70.1%

    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 405.14+70.1%
    Exit multiple
    EUR 335.73+40.9%
    Market price
    EUR 238.20

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 23.9bnEUR 25.8bnEUR 27.9bnEUR 30.1bnEUR 32.5bn+8.0%
    EBITEUR 2.2bnEUR 2.3bnEUR 2.5bnEUR 2.7bnEUR 2.9bn+8.0%
    NOPATEUR 1.7bnEUR 1.9bnEUR 2.0bnEUR 2.2bnEUR 2.3bn+8.0%
    Add depreciation & amortisationEUR 1.3bnEUR 1.4bnEUR 1.5bnEUR 1.7bnEUR 1.8bn+8.0%
    Less capital expenditureEUR -770.1mEUR -831.8mEUR -898.4mEUR -970.3mEUR -1.0bn+8.0%
    Less increase in working capitalEUR 356.1mEUR 384.7mEUR 415.5mEUR 448.7mEUR 484.7m-8.0%
    Free cashflow to firmEUR 2.6bnEUR 2.8bnEUR 3.1bnEUR 3.3bnEUR 3.6bn+8.0%
    Discount factor0.97410.92420.87680.83190.7893-
    Present valueEUR 2.6bnEUR 2.6bnEUR 2.7bnEUR 2.8bnEUR 2.8bn+2.5%
    Present Value Of The ForecastEUR 13.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.410Reported 0.120, pulled toward 1.0 (Blume)
    Cost of equity5.66%Risk-free + beta x equity risk premium
    Cost of debt4.13%Interest expense / average total debt
    Market capitalisationEUR 49.0bn88.9% of capital
    Total debtEUR 6.1bn11.1% of capital, book value as a proxy
    Tax rate20.2%Effective, capped at statutory
    WACC5.40%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 405.14

    84% of EV

    Forecast FCFF, final year
    EUR 3.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.9bn
    Less reinvestment at g/ROIC (13.0% of NOPAT)
    EUR -381.6m
    Capitalised
    EUR 2.6bn
    ROIC (reported)
    19.3%
    Terminal value, undiscounted
    EUR 90.7bn
    Terminal value, discounted
    EUR 71.6bn
    Enterprise value
    EUR 85.0bn
    Less net debt
    EUR 1.6bn
    Equity value
    EUR 83.4bn

    Exit at 15.3x EBITDA

    Value per shareEUR 335.73

    81% of EV

    Terminal value, undiscounted
    EUR 72.6bn
    Terminal value, discounted
    EUR 57.3bn
    Enterprise value
    EUR 70.8bn
    Less net debt
    EUR 1.6bn
    Equity value
    EUR 69.1bn

    Spread between methods: 19%.

    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%
    3.40%667.77865.531282.982746.38—
    4.40%439.84508.48613.11792.321170.58
    5.40%328.68361.33405.14467.09561.51
    6.40%262.79280.94303.67333.00372.35
    7.40%219.16230.22243.48259.70280.01

    Outlined: this model. Green text: above today's price of 238.20. 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 year8.0%-2.6%-10.7pp
    EBIT margin9.0%4.3%-4.7pp
    Discount rate5.4%7.5%+2.1pp
    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.