DCF Studio

    RNO.PA · PAR · Consumer Cyclical

    Renault SA

    Also onConsensus Drift

    Implied value per share

    EUR 458.66

    Market price

    EUR 27.41

    Implied upside

    +1573.3%

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

    Wrong toolThis model values the shares at 16.7x 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.

    Value Per Share

    Perpetuity growth
    EUR 458.66+1573.3%
    Exit multiple
    EUR 186.36+579.9%
    Market price
    EUR 27.41

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 62.4bnEUR 67.2bnEUR 72.4bnEUR 78.0bnEUR 84.0bn+7.7%
    EBITEUR 4.3bnEUR 4.6bnEUR 5.0bnEUR 5.3bnEUR 5.8bn+7.7%
    NOPATEUR 3.2bnEUR 3.5bnEUR 3.7bnEUR 4.0bnEUR 4.3bn+7.7%
    Add depreciation & amortisationEUR 4.2bnEUR 4.5bnEUR 4.8bnEUR 5.2bnEUR 5.6bn+7.7%
    Less capital expenditureEUR -3.5bnEUR -3.8bnEUR -4.0bnEUR -4.4bnEUR -4.7bn+7.7%
    Less increase in working capitalEUR 1.3bnEUR 1.4bnEUR 1.5bnEUR 1.6bnEUR 1.7bn-7.7%
    Free cashflow to firmEUR 5.2bnEUR 5.6bnEUR 6.0bnEUR 6.5bnEUR 7.0bn+7.7%
    Discount factor0.98510.95610.92790.90050.8739-
    Present valueEUR 5.1bnEUR 5.3bnEUR 5.6bnEUR 5.8bnEUR 6.1bn+4.6%
    Present Value Of The ForecastEUR 27.9bn

    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
    Beta0.882Reported 0.824, pulled toward 1.0 (Blume)
    Cost of equity8.49%Risk-free + beta x equity risk premium
    Cost of debt3.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 7.9bn10.3% of capital
    Total debtEUR 68.9bn89.7% of capital, book value as a proxy
    Tax rate24.6%Effective, capped at statutory
    WACC3.04%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 458.66

    84% of EV

    Forecast FCFF, final year
    EUR 7.0bn
    Capex at depreciation, working capital in reinvestment
    EUR 4.3bn
    Less reinvestment at g/ROIC (79.6% of NOPAT)
    EUR -3.5bn
    Capitalised
    EUR 885.9m
    ROIC (reported)
    3.1%
    Terminal value, undiscounted
    EUR 168.3bn
    Terminal value, discounted
    EUR 147.1bn
    Enterprise value
    EUR 175.0bn
    Less net debt
    EUR 49.7bn
    Equity value
    EUR 125.4bn

    Exit at 7.3x EBITDA

    Value per shareEUR 186.36

    72% of EV

    Terminal value, undiscounted
    EUR 83.2bn
    Terminal value, discounted
    EUR 72.7bn
    Enterprise value
    EUR 100.6bn
    Less net debt
    EUR 49.7bn
    Equity value
    EUR 50.9bn

    Spread between methods: 84%.

    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%
    1.04%—————
    2.04%1348.4913558.38———
    3.04%398.51415.18458.693547.88—
    4.04%251.83253.47255.12256.76258.41
    5.04%171.90173.16174.43175.69176.95

    Outlined: this model. Green text: above today's price of 27.41. 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 year7.7%-12.2%-19.9pp
    EBIT margin6.9%1.9%-4.9pp
    Discount rate3.0%9.1%+6.1pp
    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.