DCF Studio

    VOW.DE · GER · Consumer Cyclical

    Volkswagen AG

    Also onConsensus Drift

    Implied value per share

    EUR 3413.53

    Market price

    EUR 76.15

    Implied upside

    +4382.6%

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

    Wrong toolThis model values the shares at 44.8x the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 3413.53+4382.6%
    Exit multiple
    EUR 258.02+238.8%
    Market price
    EUR 76.15

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn7bn14bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 337.6bnEUR 354.1bnEUR 371.4bnEUR 389.5bnEUR 408.5bn+4.9%
    EBITEUR 20.8bnEUR 21.8bnEUR 22.9bnEUR 24.0bnEUR 25.1bn+4.9%
    NOPATEUR 15.4bnEUR 16.1bnEUR 16.9bnEUR 17.7bnEUR 18.6bn+4.9%
    Add depreciation & amortisationEUR 33.8bnEUR 35.4bnEUR 37.2bnEUR 39.0bnEUR 40.9bn+4.9%
    Less capital expenditureEUR -27.1bnEUR -28.5bnEUR -29.8bnEUR -31.3bnEUR -32.8bn+4.9%
    Less increase in working capitalEUR -10.4bnEUR -10.9bnEUR -11.5bnEUR -12.0bnEUR -12.6bn+4.9%
    Free cashflow to firmEUR 11.6bnEUR 12.2bnEUR 12.8bnEUR 13.4bnEUR 14.0bn+4.9%
    Discount factor0.98530.95660.92860.90160.8752-
    Present valueEUR 11.4bnEUR 11.6bnEUR 11.9bnEUR 12.1bnEUR 12.3bn+1.8%
    Present Value Of The ForecastEUR 59.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.995Reported 0.993, pulled toward 1.0 (Blume)
    Cost of equity8.57%Risk-free + beta x equity risk premium
    Cost of debt2.60%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationEUR 38.2bn16.3% of capital
    Total debtEUR 196.4bn83.7% of capital, book value as a proxy
    Tax rate26.0%Effective, capped at statutory
    WACC3.01%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 shareEUR 3413.53

    97% of EV

    Forecast FCFF, final year
    EUR 14.0bn
    Capex at depreciation, working capital in reinvestment
    EUR 24.8bn
    Less reinvestment at g/ROIC (59.8% of NOPAT)
    EUR -14.9bn
    Capitalised
    EUR 10.0bn
    ROIC (reported)
    4.2%
    Terminal value, undiscounted
    EUR 2027.3bn
    Terminal value, discounted
    EUR 1774.4bn
    Enterprise value
    EUR 1833.7bn
    Less net debt
    EUR 122.5bn
    Equity value
    EUR 1711.2bn

    Exit at 3.3x EBITDA

    Value per shareEUR 258.02

    76% of EV

    Terminal value, undiscounted
    EUR 220.0bn
    Terminal value, discounted
    EUR 192.6bn
    Enterprise value
    EUR 251.8bn
    Less net debt
    EUR 122.5bn
    Equity value
    EUR 129.3bn

    Spread between methods: 172%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    1.01%—————
    2.01%5716.71455090.99———
    3.01%1750.012170.723413.75238212.10—
    4.01%950.33973.491008.741074.101258.99
    5.01%675.12679.10683.07687.05691.02

    Outlined: this model. Green text: above today's price of 76.15. 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
    EBIT margin6.2%-1.2%-7.3pp
    Discount rate3.0%13.0%+10.0pp
    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.