DCF Studio

    SAND.ST · STO · Industrials

    Sandvik AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 108.83

    Market price

    SEK 369.90

    Implied upside

    -70.6%

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

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

    Value Per Share

    Perpetuity growth
    SEK 108.83-70.6%
    Exit multiple
    SEK 300.90-18.7%
    Market price
    SEK 369.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn10bn20bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 123.6bnSEK 126.6bnSEK 129.6bnSEK 132.8bnSEK 136.0bn+2.4%
    EBITSEK 21.0bnSEK 21.5bnSEK 22.1bnSEK 22.6bnSEK 23.1bn+2.4%
    NOPATSEK 15.8bnSEK 16.2bnSEK 16.5bnSEK 16.9bnSEK 17.4bn+2.4%
    Add depreciation & amortisationSEK 7.6bnSEK 7.7bnSEK 7.9bnSEK 8.1bnSEK 8.3bn+2.4%
    Less capital expenditureSEK -4.7bnSEK -4.9bnSEK -5.0bnSEK -5.1bnSEK -5.2bn+2.4%
    Less increase in working capitalSEK -495.5mSEK -507.5mSEK -519.7mSEK -532.3mSEK -545.2m+2.4%
    Free cashflow to firmSEK 18.1bnSEK 18.5bnSEK 19.0bnSEK 19.4bnSEK 19.9bn+2.4%
    Discount factor0.94710.84960.76220.68370.6133-
    Present valueSEK 17.1bnSEK 15.7bnSEK 14.5bnSEK 13.3bnSEK 12.2bn-8.1%
    Present Value Of The ForecastSEK 72.8bn

    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
    Beta1.218Reported 1.326, pulled toward 1.0 (Blume)
    Cost of equity12.12%Risk-free + beta x equity risk premium
    Cost of debt4.57%Interest expense / average total debt
    Market capitalisationSEK 464.0bn92.6% of capital
    Total debtSEK 37.1bn7.4% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC11.48%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 shareSEK 108.83

    57% of EV

    Forecast FCFF, final year
    SEK 19.9bn
    Capex at depreciation, working capital in reinvestment
    SEK 17.4bn
    Less reinvestment at g/ROIC (21.0% of NOPAT)
    SEK -3.7bn
    Capitalised
    SEK 13.7bn
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    SEK 156.5bn
    Terminal value, discounted
    SEK 96.0bn
    Enterprise value
    SEK 168.8bn
    Less net debt
    SEK 32.2bn
    Equity value
    SEK 136.6bn

    Exit at 17.5x EBITDA

    Value per shareSEK 300.90

    82% of EV

    Terminal value, undiscounted
    SEK 549.6bn
    Terminal value, discounted
    SEK 337.1bn
    Enterprise value
    SEK 409.9bn
    Less net debt
    SEK 32.2bn
    Equity value
    SEK 377.8bn

    Spread between methods: 94%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.48%137.18139.28141.62144.26147.28
    10.48%120.86121.99123.21124.55126.03
    11.48%107.76108.29108.83109.40109.99
    12.48%97.4697.7898.1198.4498.76
    13.48%89.0089.2989.5889.8790.16

    Outlined: this model. Green text: above today's price of 369.90. 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 year2.4%34.4%+32.0pp
    EBIT margin17.0%52.0%+35.0pp
    Discount rate11.5%5.2%-6.3pp
    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.