What is EFGN.SW's Intrinsic value?

EFG International AG (EFGN.SW) Intrinsic Value Analysis

Executive Summary

As of June 14, 2025, EFG International AG's estimated intrinsic value ranges from $12.21 to $16.08 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $16.08 +14.1%
Dividend Discount Model (Stable) $12.21 -13.4%

Is EFG International AG (EFGN.SW) undervalued or overvalued?

With the current market price at $14.10, the stock appears to be fairly valued.

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 EFG International AG'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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.08 1.23
Cost of equity 6.5% 9.5%
Cost of debt 5.0% 5.0%
Tax rate 13.6% 14.7%
Debt/Equity ratio 0.82 0.82
After-tax WACC 5.5% 7.1%

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: 51.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.0%
  • Long-term growth rate: 0.5%
  • Fair value: $16.08 (14.1% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.5% (Low) to 6.5% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $8 to $17
  • Selected fair value: $12.21 (-13.4% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $4409M
Enterprise Value $7826M
Trailing P/E 13.71
Forward P/E 12.47
Trailing EV/EBITDA 0.00
Current Dividend Yield 374.92%
Dividend Growth Rate (5Y) 17.10%
Debt-to-Equity Ratio 0.82

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% $3.22
Dividend Discount Model (Stable) 43% $1.83
Weighted Average 100% $14.42

Investment Conclusion

Based on our comprehensive valuation analysis, EFG International AG's weighted average intrinsic value is $14.42, which is approximately 2.3% above the current market price of $14.10.

Key investment considerations:

  • Historical dividend growth of 17.10%

Given these factors, we believe EFG International AG is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.