DCF Studio

    IVG.MI · MIL · Industrials

    Iveco Group N.V.

    Also onConsensus Drift

    Implied value per share

    EUR 20.00

    Market price

    EUR 14.10

    Implied upside

    +41.8%

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

    AdjustedCapital expenditure runs at 5.9% of revenue against depreciation of 4.4%. 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: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 20.00+41.8%
    Exit multiple
    EUR 10.19-27.7%
    Market price
    EUR 14.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m172m344mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 13.1bnEUR 12.8bnEUR 12.6bnEUR 12.3bnEUR 12.0bn-2.2%
    EBITEUR 727.9mEUR 711.9mEUR 696.2mEUR 680.8mEUR 665.8m-2.2%
    NOPATEUR 545.9mEUR 533.9mEUR 522.1mEUR 510.6mEUR 499.3m-2.2%
    Add depreciation & amortisationEUR 579.7mEUR 566.9mEUR 554.4mEUR 542.1mEUR 530.2m-2.2%
    Less capital expenditureEUR -775.2mEUR -758.1mEUR -741.4mEUR -725.1mEUR -709.1m-2.2%
    Less increase in working capitalEUR -6.6mEUR -6.4mEUR -6.3mEUR -6.2mEUR -6.0m-2.2%
    Free cashflow to firmEUR 343.8mEUR 336.2mEUR 328.8mEUR 321.5mEUR 314.4m-2.2%
    Discount factor0.97090.91510.86250.81300.7663-
    Present valueEUR 333.7mEUR 307.6mEUR 283.6mEUR 261.4mEUR 240.9m-7.8%
    Present Value Of The ForecastEUR 1.4bn

    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
    Beta1.023Reported 1.034, pulled toward 1.0 (Blume)
    Cost of equity10.85%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 3.8bn38.3% of capital
    Total debtEUR 6.1bn61.7% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC6.10%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 20.00

    83% of EV

    Forecast FCFF, final year
    EUR 314.4m
    Capex at depreciation, working capital in reinvestment
    EUR 499.3m
    Less reinvestment at g/ROIC (35.0% of NOPAT)
    EUR -175.0m
    Capitalised
    EUR 324.4m
    ROIC (reported)
    7.1%
    Terminal value, undiscounted
    EUR 9.2bn
    Terminal value, discounted
    EUR 7.1bn
    Enterprise value
    EUR 8.5bn
    Less net debt
    EUR 3.2bn
    Equity value
    EUR 5.4bn

    Exit at 4.9x EBITDA

    Value per shareEUR 10.19

    76% of EV

    Terminal value, undiscounted
    EUR 5.8bn
    Terminal value, discounted
    EUR 4.5bn
    Enterprise value
    EUR 5.9bn
    Less net debt
    EUR 3.2bn
    Equity value
    EUR 2.7bn

    Spread between methods: 65%.

    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%
    4.09%41.8548.3058.7378.59131.65
    5.10%26.8929.0131.9036.1342.93
    6.09%18.4619.1520.0021.0922.57
    7.09%13.0513.1613.2713.3913.51
    8.09%9.799.879.9510.0310.11

    Outlined: this model. Green text: above today's price of 14.10. 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 year-2.2%-6.3%-4.1pp
    EBIT margin5.5%4.6%-0.9pp
    Discount rate6.1%6.9%+0.8pp
    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.