DCF Studio

    MB.MI · MIL · Financial Services

    Mediobanca Banca di Credito Finanziario S.p.A.

    Also onConsensus Drift

    Implied value per share

    EUR 3.95

    Market price

    EUR 28.48

    Implied upside

    -86.1%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 28.9x 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 3.95-86.1%
    Exit multiple
    EUR 31.46+10.5%
    Market price
    EUR 28.48

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayEUR
    LineFY25FY26FY27FY28FY29CAGR
    RevenueEUR 3.7bnEUR 4.2bnEUR 4.8bnEUR 5.4bnEUR 6.2bn+13.7%
    EBITEUR 1.8bnEUR 2.1bnEUR 2.4bnEUR 2.7bnEUR 3.0bn+13.7%
    NOPATEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.0bnEUR 2.3bn+13.7%
    Add depreciation & amortisationEUR 123.1mEUR 140.0mEUR 159.1mEUR 180.9mEUR 205.7m+13.7%
    Less capital expenditureEUR -94.2mEUR -107.1mEUR -121.8mEUR -138.5mEUR -157.4m+13.7%
    Less increase in working capitalEUR 0.00EUR 0.00EUR 0.00EUR 0.00EUR 0.00-
    Free cashflow to firmEUR 1.4bnEUR 1.6bnEUR 1.8bnEUR 2.0bnEUR 2.3bn+13.7%
    Discount factor0.96730.90520.84700.79260.7417-
    Present valueEUR 1.3bnEUR 1.4bnEUR 1.5bnEUR 1.6bnEUR 1.7bn+6.4%
    Present Value Of The ForecastEUR 7.7bn

    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
    Beta0.819Reported 0.730, pulled toward 1.0 (Blume)
    Cost of equity9.52%Risk-free + beta x equity risk premium
    Cost of debt6.74%Interest expense / average total debt
    Market capitalisationEUR 23.0bn40.5% of capital
    Total debtEUR 33.7bn59.5% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC6.87%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 3.95

    77% of EV

    Forecast FCFF, final year
    EUR 2.3bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.3bn
    Less reinvestment at g/ROIC (36.4% of NOPAT)
    EUR -830.8m
    Capitalised
    EUR 1.5bn
    ROIC (WACC floor)
    6.9%
    Terminal value, undiscounted
    EUR 34.1bn
    Terminal value, discounted
    EUR 25.3bn
    Enterprise value
    EUR 32.9bn
    Less net debt
    EUR 29.6bn
    Equity value
    EUR 3.3bn

    Exit at 20.0x EBITDA

    Value per shareEUR 31.46

    86% of EV

    Terminal value, undiscounted
    EUR 65.0bn
    Terminal value, discounted
    EUR 48.2bn
    Enterprise value
    EUR 55.8bn
    Less net debt
    EUR 29.6bn
    Equity value
    EUR 26.2bn

    Spread between methods: 155%.

    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%
    4.87%20.2320.4620.6920.9221.14
    5.87%10.5310.7110.8911.0711.25
    6.87%3.663.813.954.104.25
    7.87%-1.46-1.33-1.21-1.08-0.96
    8.87%-5.41-5.31-5.20-5.09-4.99

    Outlined: this model. Green text: above today's price of 28.48. 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 year13.7%26.2%+12.5pp
    EBIT margin49.3%80.0%+30.7pp
    Discount rate6.9%4.3%-2.6pp
    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.