What is PAL.VI's Intrinsic value?

Palfinger AG (PAL.VI) Intrinsic Value Analysis

Executive Summary

As of June 19, 2025, Palfinger AG's estimated intrinsic value ranges from $25.48 to $43.94 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $43.94 +25.7%
Discounted Cash Flow (5Y) $40.14 +14.8%
Dividend Discount Model (Multi-Stage) $39.24 +12.3%
Dividend Discount Model (Stable) $38.63 +10.5%
Earnings Power Value $25.48 -27.1%

Is Palfinger AG (PAL.VI) undervalued or overvalued?

With the current market price at $34.95, the stock appears to be moderately undervalued.

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 Palfinger AG'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 2.8% 3.3%
Equity market risk premium 5.7% 6.7%
Adjusted beta 0.85 1.11
Cost of equity 7.6% 11.2%
Cost of debt 4.0% 4.5%
Tax rate 25.4% 26.0%
Debt/Equity ratio 0.62 0.62
After-tax WACC 5.9% 8.2%

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: 7.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $2,360 (FY12-2024) to $4,158 (FY12-2034)
  • 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 $40 $2,172M 82.3%
10-Year Growth $44 $2,315M 68.0%
5-Year EBITDA $54 $2,681M 85.7%
10-Year EBITDA $60 $2,922M 74.7%

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: 40.8%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.4%
  • Long-term growth rate: 3.0%
  • Fair value: $39.24 (12.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.2% (Low) to 7.6% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $18 to $59
  • Selected fair value: $38.63 (10.5% 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 $111M
Discount Rate (WACC) 8.2% - 5.9%
Enterprise Value $1,351M - $1,891M
Net Debt $663M
Equity Value $688M - $1,228M
Outstanding Shares 38M
Fair Value $18 - $33
Selected Fair Value $25.48

Key Financial Metrics

Metric Value
Market Capitalization $1314M
Enterprise Value $1977M
Trailing P/E 14.69
Forward P/E 12.23
Trailing EV/EBITDA 8.80
Current Dividend Yield 282.31%
Dividend Growth Rate (5Y) 29.06%
Debt-to-Equity Ratio 0.62

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% $13.18
Discounted Cash Flow (5Y) 25% $10.03
Dividend Discount Model (Multi-Stage) 20% $7.85
Dividend Discount Model (Stable) 15% $5.79
Earnings Power Value 10% $2.55
Weighted Average 100% $39.41

Investment Conclusion

Based on our comprehensive valuation analysis, Palfinger AG's weighted average intrinsic value is $39.41, which is approximately 12.8% above the current market price of $34.95.

Key investment considerations:

  • Strong projected earnings growth (5% to 4% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 29.06%

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