DCF Studio

    TELIA.ST · STO · Communication Services

    Telia Company AB (publ)

    Also onConsensus Drift

    Implied value per share

    SEK 21.77

    Market price

    SEK 46.03

    Implied upside

    -52.7%

    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 21.77-52.7%
    Exit multiple
    SEK 46.38+0.8%
    Market price
    SEK 46.03

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (SEK). Outflows negative.

    0bn9bn17bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todaySEK
    LineFY26FY27FY28FY29FY30CAGR
    RevenueSEK 79.5bnSEK 78.1bnSEK 76.6bnSEK 75.2bnSEK 73.9bn-1.8%
    EBITSEK 4.1bnSEK 4.0bnSEK 4.0bnSEK 3.9bnSEK 3.8bn-1.8%
    NOPATSEK 3.2bnSEK 3.2bnSEK 3.1bnSEK 3.1bnSEK 3.0bn-1.8%
    Add depreciation & amortisationSEK 28.7bnSEK 28.1bnSEK 27.6bnSEK 27.1bnSEK 26.6bn-1.8%
    Less capital expenditureSEK -14.3bnSEK -14.0bnSEK -13.7bnSEK -13.5bnSEK -13.2bn-1.8%
    Less increase in working capitalSEK -602.2mSEK -591.2mSEK -580.5mSEK -569.9mSEK -559.5m-1.8%
    Free cashflow to firmSEK 17.1bnSEK 16.7bnSEK 16.4bnSEK 16.1bnSEK 15.8bn-1.8%
    Discount factor0.97090.91510.86260.81300.7663-
    Present valueSEK 16.6bnSEK 15.3bnSEK 14.2bnSEK 13.1bnSEK 12.1bn-7.5%
    Present Value Of The ForecastSEK 71.3bn

    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
    Beta0.488Reported 0.236, pulled toward 1.0 (Blume)
    Cost of equity7.37%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationSEK 181.0bn68.4% of capital
    Total debtSEK 83.4bn31.6% of capital, book value as a proxy
    Tax rate21.1%Effective, capped at statutory
    WACC6.09%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 21.77

    55% of EV

    Forecast FCFF, final year
    SEK 15.8bn
    Capex at depreciation, working capital in reinvestment
    SEK 6.4bn
    Less reinvestment at g/ROIC (39.0% of NOPAT)
    SEK -2.5bn
    Capitalised
    SEK 3.9bn
    ROIC (reported)
    6.4%
    Terminal value, undiscounted
    SEK 112.0bn
    Terminal value, discounted
    SEK 85.8bn
    Enterprise value
    SEK 157.1bn
    Less net debt
    SEK 71.6bn
    Equity value
    SEK 85.6bn

    Exit at 7.8x EBITDA

    Value per shareSEK 46.38

    72% of EV

    Terminal value, undiscounted
    SEK 238.3bn
    Terminal value, discounted
    SEK 182.6bn
    Enterprise value
    SEK 253.9bn
    Less net debt
    SEK 71.6bn
    Equity value
    SEK 182.4bn

    Spread between methods: 72%.

    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%
    4.09%41.7746.6154.4269.28109.06
    5.09%28.6830.0531.9134.6138.94
    6.09%21.1821.4521.7722.1522.65
    7.09%16.7616.8516.9317.0217.10
    8.09%13.6413.7113.7813.8513.92

    Outlined: this model. Green text: above today's price of 46.03. 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-1.8%8.3%+10.1pp
    EBIT margin5.2%14.3%+9.2pp
    Discount rate6.1%4.4%-1.7pp
    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.