DCF Studio

    SWED-A.ST · STO · Financial Services

    Swedbank AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 280.71

    Market price

    SEK 402.40

    Implied upside

    -30.2%

    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.
    AdjustedReported capital expenditure averages just 0.79% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.97% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Current EV/EBITDA of 25.3x 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 280.71-30.2%
    Exit multiple
    SEK 558.50+38.8%
    Market price
    SEK 402.40

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn31bn62bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 74.6bnSEK 81.9bnSEK 89.9bnSEK 98.7bnSEK 108.4bn+9.8%
    EBITSEK 43.5bnSEK 47.8bnSEK 52.5bnSEK 57.6bnSEK 63.3bn+9.8%
    NOPATSEK 34.5bnSEK 37.8bnSEK 41.5bnSEK 45.6bnSEK 50.1bn+9.8%
    Add depreciation & amortisationSEK 2.9bnSEK 3.2bnSEK 3.5bnSEK 3.8bnSEK 4.2bn+9.8%
    Less capital expenditureSEK -1.5bnSEK -1.6bnSEK -1.8bnSEK -1.9bnSEK -2.1bn+9.8%
    Less increase in working capitalSEK 6.7bnSEK 7.3bnSEK 8.0bnSEK 8.8bnSEK 9.7bn-9.8%
    Free cashflow to firmSEK 42.6bnSEK 46.7bnSEK 51.3bnSEK 56.3bnSEK 61.9bn+9.8%
    Discount factor0.97320.92170.87290.82670.7829-
    Present valueSEK 41.4bnSEK 43.1bnSEK 44.8bnSEK 46.6bnSEK 48.4bn+4.0%
    Present Value Of The ForecastSEK 224.3bn

    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
    Beta0.706Reported 0.561, pulled toward 1.0 (Blume)
    Cost of equity8.79%Risk-free + beta x equity risk premium
    Cost of debt5.06%Interest expense / average total debt
    Market capitalisationSEK 452.2bn33.1% of capital
    Total debtSEK 913.7bn66.9% of capital, book value as a proxy
    Tax rate20.8%Effective, capped at statutory
    WACC5.59%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 280.71

    77% of EV

    Forecast FCFF, final year
    SEK 61.9bn
    Capex at depreciation, working capital in reinvestment
    SEK 51.7bn
    Less reinvestment at g/ROIC (44.7% of NOPAT)
    SEK -23.1bn
    Capitalised
    SEK 28.6bn
    ROIC (WACC floor)
    5.6%
    Terminal value, undiscounted
    SEK 949.1bn
    Terminal value, discounted
    SEK 743.1bn
    Enterprise value
    SEK 967.3bn
    Less net debt
    SEK 650.0bn
    Equity value
    SEK 317.3bn

    Exit at 20.0x EBITDA

    Value per shareSEK 558.50

    82% of EV

    Terminal value, undiscounted
    SEK 1350.1bn
    Terminal value, discounted
    SEK 1057.1bn
    Enterprise value
    SEK 1281.3bn
    Less net debt
    SEK 650.0bn
    Equity value
    SEK 631.3bn

    Spread between methods: 66%.

    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%
    3.59%738.36743.80749.24754.694212.10
    4.59%455.82459.90463.98468.05472.13
    5.59%274.31277.51280.72283.93287.13
    6.59%147.82150.42153.03155.64158.25
    7.59%54.6156.7858.9561.1263.29

    Outlined: this model. Green text: above today's price of 402.40. 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 year9.8%12.8%+3.0pp
    EBIT margin58.4%67.3%+8.9pp
    Discount rate5.6%4.9%-0.7pp
    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.