DCF Studio

    MBG.DE · GER · Consumer Cyclical

    Mercedes-Benz Group AG

    Also onConsensus Drift

    Implied value per share

    EUR 275.68

    Market price

    EUR 43.99

    Implied upside

    +526.6%

    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 275.68+526.6%
    Exit multiple
    EUR 86.71+97.1%
    Market price
    EUR 43.99

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn5bn9bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 126.8bnEUR 121.5bnEUR 116.5bnEUR 111.7bnEUR 107.1bn-4.1%
    EBITEUR 11.3bnEUR 10.8bnEUR 10.4bnEUR 9.9bnEUR 9.5bn-4.1%
    NOPATEUR 8.3bnEUR 7.9bnEUR 7.6bnEUR 7.3bnEUR 7.0bn-4.1%
    Add depreciation & amortisationEUR 6.0bnEUR 5.7bnEUR 5.5bnEUR 5.3bnEUR 5.0bn-4.1%
    Less capital expenditureEUR -7.4bnEUR -7.1bnEUR -6.8bnEUR -6.5bnEUR -6.2bn-4.1%
    Less increase in working capitalEUR 2.4bnEUR 2.3bnEUR 2.2bnEUR 2.1bnEUR 2.1bn+4.1%
    Free cashflow to firmEUR 9.3bnEUR 8.9bnEUR 8.5bnEUR 8.2bnEUR 7.8bn-4.1%
    Discount factor0.98180.94650.91240.87960.8479-
    Present valueEUR 9.1bnEUR 8.4bnEUR 7.8bnEUR 7.2bnEUR 6.6bn-7.6%
    Present Value Of The ForecastEUR 39.1bn

    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
    Beta0.784Reported 0.678, pulled toward 1.0 (Blume)
    Cost of equity7.31%Risk-free + beta x equity risk premium
    Cost of debt2.60%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 42.1bn33.9% of capital
    Total debtEUR 82.3bn66.1% of capital, book value as a proxy
    Tax rate26.7%Effective, capped at statutory
    WACC3.73%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 275.68

    88% of EV

    Forecast FCFF, final year
    EUR 7.8bn
    Capex at depreciation, working capital in reinvestment
    EUR 7.0bn
    Less reinvestment at g/ROIC (41.2% of NOPAT)
    EUR -2.9bn
    Capitalised
    EUR 4.1bn
    ROIC (reported)
    6.1%
    Terminal value, undiscounted
    EUR 340.9bn
    Terminal value, discounted
    EUR 289.0bn
    Enterprise value
    EUR 328.2bn
    Less net debt
    EUR 62.8bn
    Equity value
    EUR 265.3bn

    Exit at 8.7x EBITDA

    Value per shareEUR 86.71

    73% of EV

    Terminal value, undiscounted
    EUR 126.4bn
    Terminal value, discounted
    EUR 107.2bn
    Enterprise value
    EUR 146.3bn
    Less net debt
    EUR 62.8bn
    Equity value
    EUR 83.5bn

    Spread between methods: 104%.

    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%
    1.73%2172.41————
    2.73%373.92574.771633.48——
    3.73%185.58217.78275.67411.781128.68
    4.73%113.53121.69133.29151.31183.54
    5.73%75.3676.8778.7181.0584.22

    Outlined: this model. Green text: above today's price of 43.99. 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-4.1%-33.8%-29.7pp
    EBIT margin8.9%2.8%-6.1pp
    Discount rate3.7%7.5%+3.7pp
    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.