DCF Studio

    SKF-B.ST · STO · Industrials

    AB SKF (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 134.32

    Market price

    SEK 268.60

    Implied upside

    -50.0%

    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 134.32-50.0%
    Exit multiple
    SEK 226.72-15.6%
    Market price
    SEK 268.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn3bn6bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 89.9bnSEK 88.2bnSEK 86.5bnSEK 84.9bnSEK 83.3bn-1.9%
    EBITSEK 8.7bnSEK 8.5bnSEK 8.4bnSEK 8.2bnSEK 8.1bn-1.9%
    NOPATSEK 6.5bnSEK 6.4bnSEK 6.3bnSEK 6.2bnSEK 6.0bn-1.9%
    Add depreciation & amortisationSEK 3.9bnSEK 3.9bnSEK 3.8bnSEK 3.7bnSEK 3.7bn-1.9%
    Less capital expenditureSEK -4.6bnSEK -4.5bnSEK -4.4bnSEK -4.3bnSEK -4.2bn-1.9%
    Less increase in working capitalSEK -267.6mSEK -262.6mSEK -257.6mSEK -252.8mSEK -248.1m-1.9%
    Free cashflow to firmSEK 5.7bnSEK 5.5bnSEK 5.4bnSEK 5.3bnSEK 5.2bn-1.9%
    Discount factor0.95600.87380.79860.72990.6672-
    Present valueSEK 5.4bnSEK 4.8bnSEK 4.3bnSEK 3.9bnSEK 3.5bn-10.3%
    Present Value Of The ForecastSEK 22.0bn

    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
    Beta0.906Reported 0.860, pulled toward 1.0 (Blume)
    Cost of equity10.09%Risk-free + beta x equity risk premium
    Cost of debt5.15%Interest expense / average total debt
    Market capitalisationSEK 122.3bn89.1% of capital
    Total debtSEK 15.0bn10.9% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC9.41%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 134.32

    67% of EV

    Forecast FCFF, final year
    SEK 5.2bn
    Capex at depreciation, working capital in reinvestment
    SEK 6.0bn
    Less reinvestment at g/ROIC (24.5% of NOPAT)
    SEK -1.5bn
    Capitalised
    SEK 4.6bn
    ROIC (reported)
    10.2%
    Terminal value, undiscounted
    SEK 67.7bn
    Terminal value, discounted
    SEK 45.2bn
    Enterprise value
    SEK 67.2bn
    Less net debt
    SEK 6.0bn
    Equity value
    SEK 61.2bn

    Exit at 11.2x EBITDA

    Value per shareSEK 226.72

    80% of EV

    Terminal value, undiscounted
    SEK 130.8bn
    Terminal value, discounted
    SEK 87.2bn
    Enterprise value
    SEK 109.2bn
    Less net debt
    SEK 6.0bn
    Equity value
    SEK 103.2bn

    Spread between methods: 51%.

    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%
    7.41%178.21183.11188.90195.90204.57
    8.41%151.82154.25157.02160.22163.98
    9.41%132.08133.15134.32135.60137.02
    10.41%117.04117.45117.86118.27118.68
    11.41%105.82106.18106.53106.89107.25

    Outlined: this model. Green text: above today's price of 268.60. 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-1.9%11.7%+13.6pp
    EBIT margin9.7%18.1%+8.4pp
    Discount rate9.4%5.9%-3.5pp
    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.