What is ACA.PA's Intrinsic value?

Credit Agricole SA (ACA.PA) Intrinsic Value Analysis

Executive Summary

As of June 12, 2025, Credit Agricole SA's estimated intrinsic value ranges from $9.23 to $18.44 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $9.23 -41.9%
Dividend Discount Model (Stable) $18.44 +16.0%

Is Credit Agricole SA (ACA.PA) undervalued or overvalued?

With the current market price at $15.89, the stock appears to be moderately overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Credit Agricole SA's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 2.02 2.62
Cost of equity 14.7% 21.8%
Cost of debt 5.0% 5.0%
Tax rate 23.0% 23.1%
Debt/Equity ratio 6.49 6.49
After-tax WACC 5.3% 6.2%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 18.3%
  • Long-term growth rate: 1.0%
  • Fair value: $9.23 (-41.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 21.8% (Low) to 14.7% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $12 to $25
  • Selected fair value: $18.44 (16.0% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $48097M
Enterprise Value $366094M
Trailing P/E 4.34
Forward P/E 6.47
Trailing EV/EBITDA 0.00
Current Dividend Yield 650.74%
Dividend Growth Rate (5Y) 73.80%
Debt-to-Equity Ratio 6.49

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $1.85
Dividend Discount Model (Stable) 43% $2.77
Weighted Average 100% $13.18

Investment Conclusion

Based on our comprehensive valuation analysis, Credit Agricole SA's weighted average intrinsic value is $13.18, which is approximately 17.1% below the current market price of $15.89.

Key investment considerations:

  • Historical dividend growth of 73.80%

Given these factors, we believe Credit Agricole SA is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.