DCF Studio

    SHB-A.ST · STO · Financial Services

    Svenska Handelsbanken AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK -255.71

    Market price

    SEK 153.15

    Implied upside

    -267.0%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 47.7x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    SEK -255.71-267.0%
    Exit multiple
    SEK -199.47-230.2%
    Market price
    SEK 153.15

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn18bn36bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 59.5bnSEK 62.4bnSEK 65.4bnSEK 68.6bnSEK 71.9bn+4.8%
    EBITSEK 33.2bnSEK 34.8bnSEK 36.5bnSEK 38.3bnSEK 40.1bn+4.8%
    NOPATSEK 25.9bnSEK 27.1bnSEK 28.4bnSEK 29.8bnSEK 31.2bn+4.8%
    Add depreciation & amortisationSEK 2.8bnSEK 2.9bnSEK 3.1bnSEK 3.2bnSEK 3.4bn+4.8%
    Less capital expenditureSEK -1.6bnSEK -1.6bnSEK -1.7bnSEK -1.8bnSEK -1.9bn+4.8%
    Less increase in working capitalSEK 2.7bnSEK 2.9bnSEK 3.0bnSEK 3.2bnSEK 3.3bn-4.8%
    Free cashflow to firmSEK 29.9bnSEK 31.3bnSEK 32.8bnSEK 34.4bnSEK 36.1bn+4.8%
    Discount factor0.97790.93530.89450.85550.8181-
    Present valueSEK 29.2bnSEK 29.3bnSEK 29.4bnSEK 29.4bnSEK 29.5bn+0.2%
    Present Value Of The ForecastSEK 146.8bn

    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
    Beta0.668Reported 0.504, pulled toward 1.0 (Blume)
    Cost of equity8.54%Risk-free + beta x equity risk premium
    Cost of debt4.93%Interest expense / average total debt
    Market capitalisationSEK 307.0bn15.4% of capital
    Total debtSEK 1686.2bn84.6% of capital, book value as a proxy
    Tax rate22.1%Effective, capped at statutory
    WACC4.56%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 -255.71

    80% of EV

    Forecast FCFF, final year
    SEK 36.1bn
    Capex at depreciation, working capital in reinvestment
    SEK 32.7bn
    Less reinvestment at g/ROIC (54.8% of NOPAT)
    SEK -17.9bn
    Capitalised
    SEK 14.8bn
    ROIC (WACC floor)
    4.6%
    Terminal value, undiscounted
    SEK 733.9bn
    Terminal value, discounted
    SEK 600.5bn
    Enterprise value
    SEK 747.2bn
    Less net debt
    SEK 1253.6bn
    Equity value
    SEK -506.3bn

    Exit at 20.0x EBITDA

    Value per shareSEK -199.47

    83% of EV

    Terminal value, undiscounted
    SEK 870.1bn
    Terminal value, discounted
    SEK 711.8bn
    Enterprise value
    SEK 858.6bn
    Less net debt
    SEK 1253.6bn
    Equity value
    SEK -395.0bn

    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%
    2.56%28.0730.941902.22——
    3.56%-155.54-153.56-151.59-149.611818.28
    4.56%-258.68-257.20-255.72-254.24-252.76
    5.56%-324.74-323.58-322.42-321.25-320.09
    6.56%-370.68-369.74-368.80-367.85-366.91

    Outlined: this model. Green text: above today's price of 153.15. 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 year4.8%21.6%+16.8pp
    Discount rate4.6%2.7%-1.8pp
    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.