DCF Studio

    TEN.MI · MIL · Energy

    Tenaris S.A.

    Also onConsensus Drift

    Implied value per share

    EUR 29.70

    Market price

    EUR 24.43

    Implied upside

    +21.6%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.8704

    AdjustedReports in USD, trades in EUR. Modelled in USD, converted at the end.
    NoteRisk-free rate is an assumption: USD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 29.70+21.6%
    Exit multiple
    EUR 25.21+3.2%
    Market price
    EUR 24.43

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 12.1bnUSD 12.1bnUSD 12.2bnUSD 12.3bnUSD 12.4bn+0.6%
    EBITUSD 2.8bnUSD 2.8bnUSD 2.9bnUSD 2.9bnUSD 2.9bn+0.6%
    NOPATUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bn+0.6%
    Add depreciation & amortisationUSD 574.2mUSD 577.7mUSD 581.3mUSD 584.8mUSD 588.4m+0.6%
    Less capital expenditureUSD -552.1mUSD -555.5mUSD -558.9mUSD -562.4mUSD -565.8m+0.6%
    Less increase in working capitalUSD -6.5mUSD -6.5mUSD -6.6mUSD -6.6mUSD -6.7m+0.6%
    Free cashflow to firmUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bn+0.6%
    Discount factor0.96060.88640.81800.75480.6965-
    Present valueUSD 2.2bnUSD 2.1bnUSD 1.9bnUSD 1.8bnUSD 1.6bn-7.2%
    Present Value Of The ForecastUSD 9.6bn

    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
    Beta0.644Reported 0.469, pulled toward 1.0 (Blume)
    Cost of equity8.39%Risk-free + beta x equity risk premium
    Cost of debt9.10%Interest expense / average total debt
    Market capitalisationUSD 24.7bn98.2% of capital
    Total debtUSD 449.0m1.8% of capital, book value as a proxy
    Tax rate19.1%Effective, capped at statutory
    WACC8.37%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 shareUSD 34.13

    71% of EV

    Forecast FCFF, final year
    USD 2.4bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (17.4% of NOPAT)
    USD -415.3m
    Capitalised
    USD 2.0bn
    ROIC (reported)
    14.4%
    Terminal value, undiscounted
    USD 34.5bn
    Terminal value, discounted
    USD 24.0bn
    Enterprise value
    USD 33.6bn
    Less net debt
    USD -2.4bn
    Equity value
    USD 36.0bn

    Exit at 7.6x EBITDA

    Value per shareUSD 28.96

    66% of EV

    Terminal value, undiscounted
    USD 26.7bn
    Terminal value, discounted
    USD 18.6bn
    Enterprise value
    USD 28.2bn
    Less net debt
    USD -2.4bn
    Equity value
    USD 30.6bn

    Spread between methods: 16%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.37%43.8046.2549.3153.2758.58
    7.37%37.0438.4640.1742.2544.85
    8.37%32.2533.1234.1335.3236.74
    9.37%28.6629.2129.8430.5531.37
    10.37%25.8926.2426.6327.0627.56

    Outlined: this model. Green text: above today's price of 28.07. 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 year0.6%-4.3%-4.9pp
    EBIT margin23.5%18.9%-4.5pp
    Discount rate8.4%9.9%+1.5pp
    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.