DCF Studio

    SCMN.SW · EBS · Communication Services

    Swisscom AG

    Also onConsensus Drift

    Implied value per share

    CHF 6522.81

    Market price

    CHF 648.50

    Implied upside

    +905.8%

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

    Wrong toolThis model values the shares at 10.1x 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: CHF assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CHF 6522.81+905.8%
    Exit multiple
    CHF 1219.35+88.0%
    Market price
    CHF 648.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CHF). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCHF
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCHF 16.7bnCHF 18.5bnCHF 20.5bnCHF 22.7bnCHF 25.2bn+10.8%
    EBITCHF 2.9bnCHF 3.2bnCHF 3.5bnCHF 3.9bnCHF 4.3bn+10.8%
    NOPATCHF 2.4bnCHF 2.7bnCHF 3.0bnCHF 3.3bnCHF 3.7bn+10.8%
    Add depreciation & amortisationCHF 4.1bnCHF 4.6bnCHF 5.1bnCHF 5.6bnCHF 6.2bn+10.8%
    Less capital expenditureCHF -3.4bnCHF -3.8bnCHF -4.2bnCHF -4.7bnCHF -5.2bn+10.8%
    Less increase in working capitalCHF -237.2mCHF -263.0mCHF -291.5mCHF -323.1mCHF -358.1m+10.8%
    Free cashflow to firmCHF 2.9bnCHF 3.2bnCHF 3.6bnCHF 4.0bnCHF 4.4bn+10.8%
    Discount factor0.98230.94770.91440.88230.8513-
    Present valueCHF 2.9bnCHF 3.1bnCHF 3.3bnCHF 3.5bnCHF 3.7bn+6.9%
    Present Value Of The ForecastCHF 16.4bn

    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
    Beta0.602Reported 0.406, pulled toward 1.0 (Blume)
    Cost of equity3.81%Risk-free + beta x equity risk premium
    Cost of debt2.50%Implied cost of debt of 9.4% is not a credible funding cost, so risk-free + 2bp is assumed instead. Interest expense and reported debt are measuring different things - common for banks, whose interest expense includes deposits that total debt excludes.
    Market capitalisationCHF 33.6bn90.0% of capital
    Total debtCHF 3.7bn10.0% of capital, book value as a proxy
    Tax rate15.0%Effective, capped at statutory
    WACC3.64%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 6522.81

    95% of EV

    Forecast FCFF, final year
    CHF 4.4bn
    Capex at depreciation, working capital in reinvestment
    CHF 5.1bn
    Less reinvestment at g/ROIC (17.1% of NOPAT)
    CHF -878.1m
    Capitalised
    CHF 4.2bn
    ROIC (reported)
    14.6%
    Terminal value, undiscounted
    CHF 381.0bn
    Terminal value, discounted
    CHF 324.4bn
    Enterprise value
    CHF 340.8bn
    Less net debt
    CHF 2.9bn
    Equity value
    CHF 337.9bn

    Exit at 5.5x EBITDA

    Value per shareCHF 1219.35

    75% of EV

    Terminal value, undiscounted
    CHF 58.3bn
    Terminal value, discounted
    CHF 49.6bn
    Enterprise value
    CHF 66.0bn
    Less net debt
    CHF 2.9bn
    Equity value
    CHF 63.2bn

    Spread between methods: 137%.

    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%
    1.64%58999.76————
    2.64%7282.3612321.8052679.76——
    3.64%3841.474775.026523.0810986.9546734.01
    4.64%2591.142940.453451.504271.985808.13
    5.64%1944.992113.572334.952639.113083.99

    Outlined: this model. Green text: above today's price of 648.50. 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 year10.8%-31.3%-42.1pp
    EBIT margin17.2%-4.0%-21.2pp
    Discount rate3.6%13.2%+9.5pp
    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.