DCF Studio

    MUV2.DE · GER · Financial Services

    Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München

    Also onConsensus Drift

    Implied value per share

    EUR 2472.27

    Market price

    EUR 505.80

    Implied upside

    +388.8%

    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.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    AdjustedReported capital expenditure averages just 0.54% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.67% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    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 2472.27+388.8%
    Exit multiple
    EUR 1900.86+275.8%
    Market price
    EUR 505.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 64.0bnEUR 65.7bnEUR 67.5bnEUR 69.3bnEUR 71.1bn+2.7%
    EBITEUR 7.5bnEUR 7.7bnEUR 7.9bnEUR 8.1bnEUR 8.3bn+2.7%
    NOPATEUR 5.7bnEUR 5.9bnEUR 6.0bnEUR 6.2bnEUR 6.4bn+2.7%
    Add depreciation & amortisationEUR 1.1bnEUR 1.1bnEUR 1.1bnEUR 1.2bnEUR 1.2bn+2.7%
    Less capital expenditureEUR -1.1bnEUR -1.1bnEUR -1.1bnEUR -1.2bnEUR -1.2bn+2.7%
    Less increase in working capitalEUR -1.7bnEUR -1.7bnEUR -1.8bnEUR -1.8bnEUR -1.9bn+2.7%
    Free cashflow to firmEUR 4.1bnEUR 4.2bnEUR 4.3bnEUR 4.4bnEUR 4.5bn+2.7%
    Discount factor0.97270.92020.87060.82360.7792-
    Present valueEUR 3.9bnEUR 3.8bnEUR 3.7bnEUR 3.6bnEUR 3.5bn-2.9%
    Present Value Of The ForecastEUR 18.6bn

    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
    Beta0.548Reported 0.325, pulled toward 1.0 (Blume)
    Cost of equity5.89%Risk-free + beta x equity risk premium
    Cost of debt5.37%Interest expense / average total debt
    Market capitalisationEUR 63.6bn89.5% of capital
    Total debtEUR 7.4bn10.5% of capital, book value as a proxy
    Tax rate23.5%Effective, capped at statutory
    WACC5.70%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 2472.27

    88% of EV

    Forecast FCFF, final year
    EUR 4.5bn
    Capex at depreciation, working capital in reinvestment
    EUR 6.4bn
    Less reinvestment at g/ROIC (16.0% of NOPAT)
    EUR -1.0bn
    Capitalised
    EUR 5.3bn
    ROIC (reported)
    15.6%
    Terminal value, undiscounted
    EUR 171.2bn
    Terminal value, discounted
    EUR 133.4bn
    Enterprise value
    EUR 152.0bn
    Less net debt
    EUR -168.8bn
    Equity value
    EUR 320.8bn

    Exit at 8.0x EBITDA

    Value per shareEUR 1900.86

    76% of EV

    Terminal value, undiscounted
    EUR 76.0bn
    Terminal value, discounted
    EUR 59.3bn
    Enterprise value
    EUR 77.9bn
    Less net debt
    EUR -168.8bn
    Equity value
    EUR 246.6bn

    Spread between methods: 26%.

    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%
    3.70%3188.013629.724438.316399.6318146.17
    4.70%2591.282761.403008.273399.574115.80
    5.70%2279.112362.812472.282621.842838.80
    6.70%2087.332134.122191.772264.682360.00
    7.70%1957.671985.902019.332059.642109.28

    Outlined: this model. Green text: above today's price of 505.80. 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
    EBIT margin11.7%-42.4%-54.1pp
    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.