As of July 10, 2025, A2A SpA has a Discounted Cash Flow (DCF) derived fair value of $4.63 per share. With the current market price at $2.19, this represents a potential upside of 111.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $4.21 |
| DCF Fair Value (10-year) | $4.63 |
| Potential Upside (5-year) | 91.9% |
| Potential Upside (10-year) | 111.0% |
| Discount Rate (WACC) | 5.9% - 7.6% |
Revenue is projected to grow from $12570 million in 12-2024 to $18346 million by 12-2034, representing a compound annual growth rate of approximately 3.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 12570 | 13% |
| 12-2025 | 13312 | 6% |
| 12-2026 | 13632 | 2% |
| 12-2027 | 14333 | 5% |
| 12-2028 | 14620 | 2% |
| 12-2029 | 14912 | 2% |
| 12-2030 | 15414 | 3% |
| 12-2031 | 15849 | 3% |
| 12-2032 | 16783 | 6% |
| 12-2033 | 17324 | 3% |
| 12-2034 | 18346 | 6% |
Net profit margin is expected to improve from 7% in 12-2024 to 7% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 892 | 7% |
| 12-2025 | 992 | 7% |
| 12-2026 | 1016 | 7% |
| 12-2027 | 1068 | 7% |
| 12-2028 | 1090 | 7% |
| 12-2029 | 1111 | 7% |
| 12-2030 | 1149 | 7% |
| 12-2031 | 1181 | 7% |
| 12-2032 | 1251 | 7% |
| 12-2033 | 1291 | 7% |
| 12-2034 | 1367 | 7% |
with a 5-year average of $1188 million. Projected CapEx is expected to maintain at approximately 9% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 1293 |
| 12-2026 | 1337 |
| 12-2027 | 1361 |
| 12-2028 | 1364 |
| 12-2029 | 1345 |
| 12-2030 | 1385 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 90 |
| Days Inventory | 11 |
| Days Payables | 124 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 2018 | 218 | 948 | (48) | 900 |
| 2026 | 2768 | 297 | 1294 | (30) | 1206 |
| 2027 | 2865 | 313 | 1361 | 67 | 1125 |
| 2028 | 2898 | 319 | 1388 | (19) | 1210 |
| 2029 | 2910 | 325 | 1416 | 3 | 1165 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 4.21 | 91.9% |
| 10-Year DCF (Growth) | 4.63 | 111.0% |
| 5-Year DCF (EBITDA) | 2.37 | 8.0% |
| 10-Year DCF (EBITDA) | 3.22 | 46.9% |
Is A2A SpA (A2A.MI) a buy or a sell? A2A SpA is definitely a buy. Based on our DCF analysis, A2A SpA (A2A.MI) appears to be significantly undervalued with upside potential of 111.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $2.19.