As of June 15, 2025, Ence Energia y Celulosa SA's estimated intrinsic value ranges from $1.28 to $7.12 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $4.75 | +66.1% |
| Discounted Cash Flow (5Y) | $4.03 | +40.8% |
| Dividend Discount Model (Multi-Stage) | $1.28 | -55.1% |
| Dividend Discount Model (Stable) | $3.12 | +9.1% |
| Earnings Power Value | $7.12 | +149.0% |
Is Ence Energia y Celulosa SA (ENC.MC) undervalued or overvalued?
With the current market price at $2.86, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Ence Energia y Celulosa SA's intrinsic value, including:
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 | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.57 | 0.7 |
| Cost of equity | 7.3% | 10.0% |
| Cost of debt | 4.0% | 5.3% |
| Tax rate | 21.5% | 34.1% |
| Debt/Equity ratio | 0.86 | 0.86 |
| After-tax WACC | 5.4% | 7.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $4 | $1,331M | 80.5% |
| 10-Year Growth | $5 | $1,509M | 67.4% |
| 5-Year EBITDA | $2 | $718M | 63.8% |
| 10-Year EBITDA | $2 | $942M | 47.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $127M |
| Discount Rate (WACC) | 7.0% - 5.4% |
| Enterprise Value | $1,824M - $2,362M |
| Net Debt | $340M |
| Equity Value | $1,483M - $2,022M |
| Outstanding Shares | 246M |
| Fair Value | $6 - $8 |
| Selected Fair Value | $7.12 |
| Metric | Value |
|---|---|
| Market Capitalization | $704M |
| Enterprise Value | $1044M |
| Trailing P/E | 13.09 |
| Forward P/E | 30.86 |
| Trailing EV/EBITDA | 3.75 |
| Current Dividend Yield | 482.67% |
| Dividend Growth Rate (5Y) | -13.28% |
| Debt-to-Equity Ratio | 0.86 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $1.42 |
| Discounted Cash Flow (5Y) | 25% | $1.01 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.26 |
| Dividend Discount Model (Stable) | 15% | $0.47 |
| Earnings Power Value | 10% | $0.71 |
| Weighted Average | 100% | $3.87 |
Based on our comprehensive valuation analysis, Ence Energia y Celulosa SA's weighted average intrinsic value is $3.87, which is approximately 35.3% above the current market price of $2.86.
Key investment considerations:
Given these factors, we believe Ence Energia y Celulosa SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.