As of June 21, 2025, First Trust Dynamic Europe Equity Income Fund has a Discounted Cash Flow (DCF) derived fair value of $11.47 per share. With the current market price at $12.59, this represents a potential upside of -8.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $10.48 |
| DCF Fair Value (10-year) | $11.47 |
| Potential Upside (5-year) | -16.7% |
| Potential Upside (10-year) | -8.9% |
| Discount Rate (WACC) | 6.7% - 9.2% |
Revenue is projected to grow from $15 million in 12-2022 to $19 million by 12-2032, representing a compound annual growth rate of approximately 2.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2022 | 15 | 4% |
| 12-2023 | 16 | 5% |
| 12-2024 | 16 | 3% |
| 12-2025 | 17 | 3% |
| 12-2026 | 17 | 2% |
| 12-2027 | 17 | 2% |
| 12-2028 | 18 | 2% |
| 12-2029 | 18 | 2% |
| 12-2030 | 18 | 2% |
| 12-2031 | 19 | 4% |
| 12-2032 | 19 | 2% |
Net profit margin is expected to improve from -178% in 12-2022 to -130% by 12-2032, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2022 | (27) | -178% |
| 12-2023 | (20) | -130% |
| 12-2024 | (21) | -130% |
| 12-2025 | (22) | -130% |
| 12-2026 | (22) | -130% |
| 12-2027 | (23) | -130% |
| 12-2028 | (23) | -130% |
| 12-2029 | (23) | -130% |
| 12-2030 | (24) | -130% |
| 12-2031 | (25) | -130% |
| 12-2032 | (25) | -130% |
with a 5-year average of $0 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2023 | 0 |
| 12-2024 | 0 |
| 12-2025 | 0 |
| 12-2026 | 0 |
| 12-2027 | 0 |
| 12-2028 | 0 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 87 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2023 | 10 | (8) | 0 | 1 | 17 |
| 2024 | 10 | (8) | 0 | (0) | 19 |
| 2025 | 11 | (8) | 0 | 0 | 19 |
| 2026 | 11 | (8) | 0 | 0 | 19 |
| 2027 | 11 | (8) | 0 | (0) | 20 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 10.48 | -16.7% |
| 10-Year DCF (Growth) | 11.47 | -8.9% |
| 5-Year DCF (EBITDA) | 10.91 | -13.4% |
| 10-Year DCF (EBITDA) | 11.78 | -6.5% |
Is First Trust Dynamic Europe Equity Income Fund (FDEU) a buy or a sell? First Trust Dynamic Europe Equity Income Fund is definitely a sell. Based on our DCF analysis, First Trust Dynamic Europe Equity Income Fund (FDEU) appears to be fairly valued with upside potential of -8.9%. 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 hold at the current market price of $12.59.