DCF Studio

    NDA-FI.HE · HEL · Financial Services

    Nordea Bank Abp

    Also onConsensus Drift

    Implied value per share

    EUR -9.30

    Market price

    EUR 17.57

    Implied upside

    -152.9%

    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.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 31.9x 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 -9.30-152.9%
    Exit multiple
    EUR 3.17-81.9%
    Market price
    EUR 17.57

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 12.5bnEUR 13.3bnEUR 14.2bnEUR 15.1bnEUR 16.1bn+6.6%
    EBITEUR 6.6bnEUR 7.0bnEUR 7.5bnEUR 8.0bnEUR 8.5bn+6.6%
    NOPATEUR 5.1bnEUR 5.4bnEUR 5.8bnEUR 6.2bnEUR 6.6bn+6.6%
    Add depreciation & amortisationEUR 659.5mEUR 702.9mEUR 749.3mEUR 798.6mEUR 851.3m+6.6%
    Less capital expenditureEUR -591.8mEUR -630.8mEUR -672.3mEUR -716.7mEUR -763.9m+6.6%
    Less increase in working capitalEUR -772.3mEUR -823.2mEUR -877.4mEUR -935.3mEUR -996.9m+6.6%
    Free cashflow to firmEUR 4.4bnEUR 4.7bnEUR 5.0bnEUR 5.3bnEUR 5.7bn+6.6%
    Discount factor0.97580.92910.88460.84230.8020-
    Present valueEUR 4.3bnEUR 4.3bnEUR 4.4bnEUR 4.5bnEUR 4.5bn+1.5%
    Present Value Of The ForecastEUR 22.0bn

    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
    Beta0.759Reported 0.640, pulled toward 1.0 (Blume)
    Cost of equity9.13%Risk-free + beta x equity risk premium
    Cost of debt4.99%Interest expense / average total debt
    Market capitalisationEUR 59.6bn22.4% of capital
    Total debtEUR 206.6bn77.6% of capital, book value as a proxy
    Tax rate23.1%Effective, capped at statutory
    WACC5.03%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 -9.30

    83% of EV

    Forecast FCFF, final year
    EUR 5.7bn
    Capex at depreciation, working capital in reinvestment
    EUR 6.6bn
    Less reinvestment at g/ROIC (49.7% of NOPAT)
    EUR -3.3bn
    Capitalised
    EUR 3.3bn
    ROIC (WACC floor)
    5.0%
    Terminal value, undiscounted
    EUR 133.8bn
    Terminal value, discounted
    EUR 107.3bn
    Enterprise value
    EUR 129.3bn
    Less net debt
    EUR 161.4bn
    Equity value
    EUR -32.1bn

    Exit at 20.0x EBITDA

    Value per shareEUR 3.17

    87% of EV

    Terminal value, undiscounted
    EUR 187.5bn
    Terminal value, discounted
    EUR 150.4bn
    Enterprise value
    EUR 172.4bn
    Less net debt
    EUR 161.4bn
    Equity value
    EUR 11.0bn

    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%
    3.03%15.6315.9016.18602.33—
    4.03%-0.130.070.270.460.66
    5.03%-9.60-9.45-9.30-9.15-8.99
    6.03%-15.92-15.80-15.68-15.55-15.43
    7.03%-20.43-20.33-20.23-20.13-20.03

    Outlined: this model. Green text: above today's price of 17.57. 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 year6.6%20.7%+14.1pp
    EBIT margin52.9%89.9%+37.0pp
    Discount rate5.0%3.0%-2.1pp
    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.