DCF Studio

    PGHN.SW · EBS · Financial Services

    Partners Group Holding AG

    Also onConsensus Drift

    Implied value per share

    CHF 2438.06

    Market price

    CHF 613.00

    Implied upside

    +297.7%

    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.
    AdjustedCapital expenditure runs at 4.6% of revenue against depreciation of 2.4%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: CHF assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CHF 2438.06+297.7%
    Exit multiple
    CHF 1072.57+75.0%
    Market price
    CHF 613.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CHF). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCHF
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCHF 2.7bnCHF 3.0bnCHF 3.3bnCHF 3.7bnCHF 4.1bn+10.7%
    EBITCHF 1.7bnCHF 1.9bnCHF 2.1bnCHF 2.3bnCHF 2.6bn+10.7%
    NOPATCHF 1.5bnCHF 1.6bnCHF 1.8bnCHF 2.0bnCHF 2.2bn+10.7%
    Add depreciation & amortisationCHF 65.9mCHF 72.9mCHF 80.7mCHF 89.4mCHF 98.9m+10.7%
    Less capital expenditureCHF -126.6mCHF -140.1mCHF -155.1mCHF -171.7mCHF -190.1m+10.7%
    Less increase in working capitalCHF -263.5mCHF -291.8mCHF -323.0mCHF -357.6mCHF -395.9m+10.7%
    Free cashflow to firmCHF 1.1bnCHF 1.3bnCHF 1.4bnCHF 1.6bnCHF 1.7bn+10.7%
    Discount factor0.97460.92580.87950.83550.7936-
    Present valueCHF 1.1bnCHF 1.2bnCHF 1.2bnCHF 1.3bnCHF 1.4bn+5.2%
    Present Value Of The ForecastCHF 6.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate0.50%CHF assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.971Reported 0.957, pulled toward 1.0 (Blume)
    Cost of equity5.84%Risk-free + beta x equity risk premium
    Cost of debt1.94%Interest expense / average total debt
    Market capitalisationCHF 15.8bn86.4% of capital
    Total debtCHF 2.5bn13.6% of capital, book value as a proxy
    Tax rate15.0%Effective, capped at statutory
    WACC5.27%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 shareCHF 2438.06

    91% of EV

    Forecast FCFF, final year
    CHF 1.7bn
    Capex at depreciation, working capital in reinvestment
    CHF 2.2bn
    Less reinvestment at g/ROIC (9.2% of NOPAT)
    CHF -205.2m
    Capitalised
    CHF 2.0bn
    ROIC (reported)
    27.1%
    Terminal value, undiscounted
    CHF 74.8bn
    Terminal value, discounted
    CHF 59.4bn
    Enterprise value
    CHF 65.6bn
    Less net debt
    CHF 2.2bn
    Equity value
    CHF 63.4bn

    Exit at 11.1x EBITDA

    Value per shareCHF 1072.57

    79% of EV

    Terminal value, undiscounted
    CHF 30.1bn
    Terminal value, discounted
    CHF 23.9bn
    Enterprise value
    CHF 30.1bn
    Less net debt
    CHF 2.2bn
    Equity value
    CHF 27.9bn

    Spread between methods: 78%.

    Sensitivity

    Value per share (CHF) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.27%4180.005676.859114.1225244.06—
    4.27%2616.743113.483890.035276.678460.81
    5.27%1883.682118.682438.062897.533615.78
    6.27%1458.711590.551757.021974.032268.93
    7.27%1181.641263.421362.101483.611637.05

    Outlined: this model. Green text: above today's price of 613.00. 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 year10.7%-17.8%-28.5pp
    EBIT margin63.5%18.4%-45.1pp
    Discount rate5.3%12.1%+6.9pp
    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.