DCF Studio

    INW.MI · MIL · Real Estate

    Infrastrutture Wireless Italiane S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR 8.04

    Market price

    EUR 6.51

    Implied upside

    +23.4%

    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.

    Value Per Share

    Perpetuity growth
    EUR 8.04+23.4%
    Exit multiple
    EUR 11.28+73.1%
    Market price
    EUR 6.51

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m475m950mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 1.2bnEUR 1.3bnEUR 1.4bnEUR 1.5bnEUR 1.6bn+8.1%
    EBITEUR 618.4mEUR 668.5mEUR 722.5mEUR 781.0mEUR 844.1m+8.1%
    NOPATEUR 523.1mEUR 565.4mEUR 611.1mEUR 660.6mEUR 714.0m+8.1%
    Add depreciation & amortisationEUR 449.3mEUR 485.6mEUR 524.9mEUR 567.3mEUR 613.2m+8.1%
    Less capital expenditureEUR -337.4mEUR -364.7mEUR -394.2mEUR -426.1mEUR -460.6m+8.1%
    Less increase in working capitalEUR 61.0mEUR 66.0mEUR 71.3mEUR 77.1mEUR 83.3m-8.1%
    Free cashflow to firmEUR 696.0mEUR 752.2mEUR 813.1mEUR 878.9mEUR 949.9m+8.1%
    Discount factor0.96710.90460.84610.79140.7402-
    Present valueEUR 673.1mEUR 680.5mEUR 688.0mEUR 695.5mEUR 703.2m+1.1%
    Present Value Of The ForecastEUR 3.4bn

    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
    Beta0.885Reported 0.828, pulled toward 1.0 (Blume)
    Cost of equity9.95%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 5.9bn52.5% of capital
    Total debtEUR 5.3bn47.5% of capital, book value as a proxy
    Tax rate15.4%Effective, capped at statutory
    WACC6.91%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 8.04

    72% of EV

    Forecast FCFF, final year
    EUR 949.9m
    Capex at depreciation, working capital in reinvestment
    EUR 825.7m
    Less reinvestment at g/ROIC (36.2% of NOPAT)
    EUR -298.6m
    Capitalised
    EUR 527.1m
    ROIC (WACC floor)
    6.9%
    Terminal value, undiscounted
    EUR 12.2bn
    Terminal value, discounted
    EUR 9.1bn
    Enterprise value
    EUR 12.5bn
    Less net debt
    EUR 5.1bn
    Equity value
    EUR 7.4bn

    Exit at 11.2x EBITDA

    Value per shareEUR 11.28

    78% of EV

    Terminal value, undiscounted
    EUR 16.3bn
    Terminal value, discounted
    EUR 12.0bn
    Enterprise value
    EUR 15.5bn
    Less net debt
    EUR 5.1bn
    Equity value
    EUR 10.4bn

    Spread between methods: 33%.

    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%
    4.91%14.4415.1516.1317.5920.04
    5.91%10.1810.2410.3110.3710.44
    6.91%7.947.998.048.098.14
    7.91%6.286.326.366.406.44
    8.91%4.985.025.055.085.12

    Outlined: this model. Green text: above today's price of 6.51. 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 year8.1%5.4%-2.7pp
    EBIT margin53.1%46.0%-7.2pp
    Discount rate6.9%7.8%+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.