What is PIC.BR's Intrinsic value?

Picanol NV (PIC.BR) Intrinsic Value Analysis

Executive Summary

As of June 10, 2025, Picanol NV's estimated intrinsic value ranges from $34.08 to $199.13 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $35.94 -45.5%
Discounted Cash Flow (5Y) $34.08 -48.4%
Dividend Discount Model (Multi-Stage) $199.13 +201.7%
Dividend Discount Model (Stable) $111.19 +68.5%
Earnings Power Value $108.73 +64.7%

Is Picanol NV (PIC.BR) undervalued or overvalued?

With the current market price at $66.00, the stock appears to be significantly 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 Picanol NV'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 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.97 1.1
Cost of equity 8.7% 11.5%
Cost of debt 4.0% 491.8%
Tax rate 21.8% 25.1%
Debt/Equity ratio 0.35 0.35
After-tax WACC 7.2% 103.6%

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: 55.4% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $2,742 (FY12-2021) to $3,350 (FY12-2031)
  • Net profit margin expansion from 9% to 13%
  • Capital expenditures maintained at approximately 4% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $34 $625M 14.0%
10-Year Growth $36 $659M 1.9%
5-Year EBITDA $50 $908M 40.8%
10-Year EBITDA $38 $697M 7.3%

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: 3.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.1%
  • Long-term growth rate: 3.5%
  • Fair value: $199.13 (201.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.5% (Low) to 8.7% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $59 to $164
  • Selected fair value: $111.19 (68.5% 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 $266M
Discount Rate (WACC) 103.6% - 7.2%
Enterprise Value $257M - $3,672M
Net Debt $14M
Equity Value $242M - $3,657M
Outstanding Shares 18M
Fair Value $14 - $204
Selected Fair Value $108.73

Key Financial Metrics

Metric Value
Market Capitalization $1183M
Enterprise Value $1198M
Trailing P/E 8.69
Forward P/E 5.35
Trailing EV/EBITDA 4.85
Current Dividend Yield 34.64%
Dividend Growth Rate (5Y) -23.70%
Debt-to-Equity Ratio 0.35

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% $10.78
Discounted Cash Flow (5Y) 25% $8.52
Dividend Discount Model (Multi-Stage) 20% $39.83
Dividend Discount Model (Stable) 15% $16.68
Earnings Power Value 10% $10.87
Weighted Average 100% $86.68

Investment Conclusion

Based on our comprehensive valuation analysis, Picanol NV's weighted average intrinsic value is $86.68, which is approximately 31.3% above the current market price of $66.00.

Key investment considerations:

  • Strong projected earnings growth (9% to 13% margin)
  • Consistent cash flow generation

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