DCF Studio

    ROVI.MC · MCE · Healthcare

    Laboratorios Farmaceuticos Rovi, S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 46.13

    Market price

    EUR 57.65

    Implied upside

    -20.0%

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

    AdjustedCapital expenditure runs at 7.6% of revenue against depreciation of 3.4%. 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: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 46.13-20.0%
    Exit multiple
    EUR 46.46-19.4%
    Market price
    EUR 57.65

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0m61m123mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 720.3mEUR 697.8mEUR 676.0mEUR 654.9mEUR 634.5m-3.1%
    EBITEUR 191.5mEUR 185.5mEUR 179.7mEUR 174.1mEUR 168.7m-3.1%
    NOPATEUR 147.7mEUR 143.1mEUR 138.6mEUR 134.3mEUR 130.1m-3.1%
    Add depreciation & amortisationEUR 24.3mEUR 23.5mEUR 22.8mEUR 22.1mEUR 21.4m-3.1%
    Less capital expenditureEUR -54.4mEUR -52.7mEUR -51.0mEUR -49.5mEUR -47.9m-3.1%
    Less increase in working capitalEUR 5.2mEUR 5.1mEUR 4.9mEUR 4.7mEUR 4.6m+3.1%
    Free cashflow to firmEUR 122.8mEUR 119.0mEUR 115.3mEUR 111.7mEUR 108.2m-3.1%
    Discount factor0.96580.90090.84040.78390.7312-
    Present valueEUR 118.6mEUR 107.2mEUR 96.9mEUR 87.5mEUR 79.1m-9.6%
    Present Value Of The ForecastEUR 489.4m

    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
    Beta0.487Reported 0.235, pulled toward 1.0 (Blume)
    Cost of equity7.37%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 2.9bn96.0% of capital
    Total debtEUR 121.7m4.0% of capital, book value as a proxy
    Tax rate22.9%Effective, capped at statutory
    WACC7.20%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 46.13

    79% of EV

    Forecast FCFF, final year
    EUR 108.2m
    Capex at depreciation, working capital in reinvestment
    EUR 132.2m
    Less reinvestment at g/ROIC (10.1% of NOPAT)
    EUR -13.3m
    Capitalised
    EUR 118.9m
    ROIC (reported)
    24.8%
    Terminal value, undiscounted
    EUR 2.6bn
    Terminal value, discounted
    EUR 1.9bn
    Enterprise value
    EUR 2.4bn
    Less net debt
    EUR 23.7m
    Equity value
    EUR 2.4bn

    Exit at 13.7x EBITDA

    Value per shareEUR 46.46

    80% of EV

    Terminal value, undiscounted
    EUR 2.6bn
    Terminal value, discounted
    EUR 1.9bn
    Enterprise value
    EUR 2.4bn
    Less net debt
    EUR 23.7m
    Equity value
    EUR 2.4bn

    Spread between methods: 1%.

    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%
    5.20%62.4769.7279.6294.01116.80
    6.20%49.2753.2758.3565.0174.10
    7.20%40.6943.1546.1349.8054.45
    8.20%34.6836.2938.1940.4343.15
    9.20%30.2331.3432.6134.0935.81

    Outlined: this model. Green text: above today's price of 57.65. 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 year-3.1%2.0%+5.1pp
    EBIT margin26.6%33.0%+6.4pp
    Discount rate7.2%6.3%-1.0pp
    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.