What is HLDX.ST's Intrinsic value?

Haldex AB (HLDX.ST) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Haldex AB's estimated intrinsic value ranges from $24.81 to $95.90 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $95.90 +46.4%
Discounted Cash Flow (5Y) $71.48 +9.1%
Dividend Discount Model (Multi-Stage) $59.76 -8.8%
Dividend Discount Model (Stable) $67.55 +3.1%
Earnings Power Value $24.81 -62.1%

Is Haldex AB (HLDX.ST) undervalued or overvalued?

With the current market price at $65.50, 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 Haldex AB's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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 2.5% 3.0%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.73 0.89
Cost of equity 6.3% 8.9%
Cost of debt 4.0% 4.9%
Tax rate 35.3% 46.7%
Debt/Equity ratio 0.43 0.43
After-tax WACC 5.1% 7.0%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.1% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $4,612 (FY12-2021) to $6,940 (FY12-2031)
  • Net profit margin expansion from 5% to 4%
  • Capital expenditures maintained at approximately 6% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $71 $4,590M 83.9%
10-Year Growth $96 $5,777M 71.1%
5-Year EBITDA $47 $3,423M 78.5%
10-Year EBITDA $61 $4,076M 59.0%

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: 7.6%
  • Long-term growth rate: 2.0%
  • Fair value: $59.76 (-8.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.9% (Low) to 6.3% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $33 to $102
  • Selected fair value: $67.55 (3.1% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $138M
Discount Rate (WACC) 7.0% - 5.1%
Enterprise Value $1,965M - $2,676M
Net Debt $1,114M
Equity Value $851M - $1,562M
Outstanding Shares 49M
Fair Value $18 - $32
Selected Fair Value $24.81

Key Financial Metrics

Metric Value
Market Capitalization $3185M
Enterprise Value $4299M
Trailing P/E 17.69
Forward P/E 17.18
Trailing EV/EBITDA 4.85
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 0.43

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
Discounted Cash Flow (10Y) 30% $28.77
Discounted Cash Flow (5Y) 25% $17.87
Dividend Discount Model (Multi-Stage) 20% $11.95
Dividend Discount Model (Stable) 15% $10.13
Earnings Power Value 10% $2.48
Weighted Average 100% $71.20

Investment Conclusion

Based on our comprehensive valuation analysis, Haldex AB's weighted average intrinsic value is $71.20, which is approximately 8.7% above the current market price of $65.50.

Key investment considerations:

  • Strong projected earnings growth (5% to 4% margin)
  • Consistent cash flow generation

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