DCF Studio

    PUB.PA · PAR · Communication Services

    Publicis Groupe S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 3693.70

    Market price

    EUR 97.52

    Implied upside

    +3687.6%

    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.
    Wrong toolThis model values the shares at 37.9x the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    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 3693.70+3687.6%
    Exit multiple
    EUR 187.03+91.8%
    Market price
    EUR 97.52

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 18.6bnEUR 19.9bnEUR 21.3bnEUR 22.8bnEUR 24.4bn+7.0%
    EBITEUR 2.7bnEUR 2.9bnEUR 3.1bnEUR 3.3bnEUR 3.6bn+7.0%
    NOPATEUR 2.0bnEUR 2.2bnEUR 2.3bnEUR 2.5bnEUR 2.7bn+7.0%
    Add depreciation & amortisationEUR 961.1mEUR 1.0bnEUR 1.1bnEUR 1.2bnEUR 1.3bn+7.0%
    Less capital expenditureEUR -257.5mEUR -275.6mEUR -294.9mEUR -315.6mEUR -337.8m+7.0%
    Less increase in working capitalEUR -18.1mEUR -19.4mEUR -20.8mEUR -22.2mEUR -23.8m+7.0%
    Free cashflow to firmEUR 2.7bnEUR 2.9bnEUR 3.1bnEUR 3.3bnEUR 3.6bn+7.0%
    Discount factor0.98640.95980.93390.90870.8842-
    Present valueEUR 2.7bnEUR 2.8bnEUR 2.9bnEUR 3.0bnEUR 3.2bn+4.1%
    Present Value Of The ForecastEUR 14.6bn

    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
    Beta0.732Reported 0.600, pulled toward 1.0 (Blume)
    Cost of equity7.59%Risk-free + beta x equity risk premium
    Cost of debt3.71%Interest expense / average total debt
    Market capitalisationEUR 0.000.0% of capital
    Total debtEUR 5.7bn100.0% of capital, book value as a proxy
    Tax rate25.3%Effective, capped at statutory
    WACC2.77%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 3693.70

    98% of EV

    Forecast FCFF, final year
    EUR 3.6bn
    Capex at depreciation, working capital in reinvestment
    EUR 3.5bn
    Less reinvestment at g/ROIC (19.8% of NOPAT)
    EUR -686.6m
    Capitalised
    EUR 2.8bn
    ROIC (reported)
    12.6%
    Terminal value, undiscounted
    EUR 1043.5bn
    Terminal value, discounted
    EUR 922.6bn
    Enterprise value
    EUR 937.2bn
    Less net debt
    EUR 1.5bn
    Equity value
    EUR 935.8bn

    Exit at 8.0x EBITDA

    Value per shareEUR 187.03

    70% of EV

    Terminal value, undiscounted
    EUR 38.7bn
    Terminal value, discounted
    EUR 34.2bn
    Enterprise value
    EUR 48.8bn
    Less net debt
    EUR 1.5bn
    Equity value
    EUR 47.4bn

    Spread between methods: 181%.

    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%
    0.77%—————
    1.77%4194.79————
    2.77%900.561393.483693.52——
    3.77%505.41610.22797.041225.093222.30
    4.77%351.68391.84449.49539.40699.63

    Outlined: this model. Green text: above today's price of 97.52. 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 year7.0%-48.7%-55.7pp
    EBIT margin14.7%-3.8%-18.4pp
    Discount rate2.8%13.6%+10.8pp
    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.