DCF Studio

    IFX.DE · GER · Technology

    Infineon Technologies AG

    Also onConsensus Drift

    Implied value per share

    EUR 11.71

    Market price

    EUR 55.86

    Implied upside

    -79.0%

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

    AdjustedCapital expenditure runs at 16.8% of revenue against depreciation of 12.0%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Current EV/EBITDA of 20.1x 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
    EUR 11.71-79.0%
    Exit multiple
    EUR 45.07-19.3%
    Market price
    EUR 55.86

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 14.8bnEUR 15.0bnEUR 15.1bnEUR 15.3bnEUR 15.4bn+1.0%
    EBITEUR 2.8bnEUR 2.8bnEUR 2.8bnEUR 2.9bnEUR 2.9bn+1.0%
    NOPATEUR 2.2bnEUR 2.2bnEUR 2.3bnEUR 2.3bnEUR 2.3bn+1.0%
    Add depreciation & amortisationEUR 1.8bnEUR 1.8bnEUR 1.8bnEUR 1.8bnEUR 1.9bn+1.0%
    Less capital expenditureEUR -2.5bnEUR -2.5bnEUR -2.5bnEUR -2.6bnEUR -2.6bn+1.0%
    Less increase in working capitalEUR 26.7mEUR 26.9mEUR 27.2mEUR 27.5mEUR 27.8m-1.0%
    Free cashflow to firmEUR 1.5bnEUR 1.6bnEUR 1.6bnEUR 1.6bnEUR 1.6bn+1.0%
    Discount factor0.94710.84940.76190.68330.6129-
    Present valueEUR 1.5bnEUR 1.3bnEUR 1.2bnEUR 1.1bnEUR 981.1m-9.4%
    Present Value Of The ForecastEUR 6.0bn

    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
    Beta1.625Reported 1.933, pulled toward 1.0 (Blume)
    Cost of equity12.35%Risk-free + beta x equity risk premium
    Cost of debt3.57%Interest expense / average total debt
    Market capitalisationEUR 72.6bn91.0% of capital
    Total debtEUR 7.2bn9.0% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC11.49%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 11.71

    70% of EV

    Forecast FCFF, final year
    EUR 1.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.6bn
    Less reinvestment at g/ROIC (21.8% of NOPAT)
    EUR -572.8m
    Capitalised
    EUR 2.1bn
    ROIC (WACC floor)
    11.5%
    Terminal value, undiscounted
    EUR 23.5bn
    Terminal value, discounted
    EUR 14.4bn
    Enterprise value
    EUR 20.4bn
    Less net debt
    EUR 5.1bn
    Equity value
    EUR 15.3bn

    Exit at 20.0x EBITDA

    Value per shareEUR 45.07

    91% of EV

    Terminal value, undiscounted
    EUR 94.6bn
    Terminal value, discounted
    EUR 58.0bn
    Enterprise value
    EUR 64.0bn
    Less net debt
    EUR 5.1bn
    Equity value
    EUR 58.9bn

    Spread between methods: 117%.

    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%
    9.49%15.4115.5615.7215.9016.10
    10.49%13.2413.3013.3613.4213.48
    11.49%11.6111.6611.7111.7711.82
    12.49%10.2410.2910.3410.3910.43
    13.49%9.099.139.189.229.26

    Outlined: this model. Green text: above today's price of 55.86. 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 year1.0%33.5%+32.5pp
    EBIT margin18.7%69.2%+50.5pp
    Discount rate11.5%4.8%-6.7pp
    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.