DCF Studio

    ML.PA · PAR

    Compagnie Générale des Établissements Michelin Société en commandite par actions

    Also onConsensus Drift

    Implied value per share

    EUR 199.55

    Market price

    EUR 33.08

    Implied upside

    +503.2%

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

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    EUR 199.55+503.2%
    Exit multiple
    EUR 48.51+46.6%
    Market price
    EUR 33.08

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 25.2bnEUR 24.4bnEUR 23.6bnEUR 22.9bnEUR 22.2bn-3.1%
    EBITEUR 2.8bnEUR 2.7bnEUR 2.7bnEUR 2.6bnEUR 2.5bn-3.1%
    NOPATEUR 2.2bnEUR 2.1bnEUR 2.0bnEUR 2.0bnEUR 1.9bn-3.1%
    Add depreciation & amortisationEUR 1.8bnEUR 1.8bnEUR 1.7bnEUR 1.7bnEUR 1.6bn-3.1%
    Less capital expenditureEUR -2.0bnEUR -1.9bnEUR -1.9bnEUR -1.8bnEUR -1.8bn-3.1%
    Less increase in working capitalEUR 184.0mEUR 178.2mEUR 172.7mEUR 167.3mEUR 162.0m+3.1%
    Free cashflow to firmEUR 2.2bnEUR 2.1bnEUR 2.1bnEUR 2.0bnEUR 1.9bn-3.1%
    Discount factor0.98120.94460.90940.87550.8428-
    Present valueEUR 2.2bnEUR 2.0bnEUR 1.9bnEUR 1.8bnEUR 1.6bn-6.7%
    Present Value Of The ForecastEUR 9.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta1.000As reported
    Cost of equity9.20%Risk-free + beta x equity risk premium
    Cost of debt5.07%Interest expense / average total debt
    Market capitalisationEUR 0.000.0% of capital
    Total debtEUR 6.6bn100.0% of capital, book value as a proxy
    Tax rate23.5%Effective, capped at statutory
    WACC3.87%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 199.55

    93% of EV

    Forecast FCFF, final year
    EUR 1.9bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.9bn
    Less reinvestment at g/ROIC (25.0% of NOPAT)
    EUR -719.3m
    Capitalised
    EUR 2.2bn
    ROIC (reported)
    10.0%
    Terminal value, undiscounted
    EUR 160.8bn
    Terminal value, discounted
    EUR 135.5bn
    Enterprise value
    EUR 144.9bn
    Less net debt
    EUR 2.6bn
    Equity value
    EUR 142.3bn

    Exit at 8.0x EBITDA

    Value per shareEUR 48.51

    75% of EV

    Terminal value, undiscounted
    EUR 33.0bn
    Terminal value, discounted
    EUR 27.8bn
    Enterprise value
    EUR 37.2bn
    Less net debt
    EUR 2.6bn
    Equity value
    EUR 34.6bn

    Spread between methods: 122%.

    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%
    1.87%865.99————
    2.87%232.62341.10739.49——
    3.87%132.97157.42199.55289.70620.71
    4.87%92.43101.60114.57134.37168.47
    5.87%70.4574.6279.9787.1497.26

    Outlined: this model. Green text: above today's price of 33.08. 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-3.1%-35.2%-32.1pp
    EBIT margin11.2%-2.2%-13.5pp
    Discount rate3.9%10.5%+6.6pp
    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.