What is SIGN.SW's Intrinsic value?

SIG Combibloc Group AG (SIGN.SW) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, SIG Combibloc Group AG's estimated intrinsic value ranges from $7.75 to $17.56 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $17.56 +77.3%
Discounted Cash Flow (5Y) $11.19 +12.9%
Dividend Discount Model (Multi-Stage) $10.34 +4.4%
Dividend Discount Model (Stable) $7.75 -21.8%
Earnings Power Value $10.98 +10.9%

Is SIG Combibloc Group AG (SIGN.SW) undervalued or overvalued?

With the current market price at $9.90, 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 SIG Combibloc Group 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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.9 0.97
Cost of equity 5.6% 7.9%
Cost of debt 4.0% 4.5%
Tax rate 25.1% 27.5%
Debt/Equity ratio 0.61 0.61
After-tax WACC 4.6% 6.1%

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: 5.4% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $3,328 (FY12-2024) to $6,467 (FY12-2034)
  • Net profit margin expansion from 6% to 6%
  • Capital expenditures maintained at approximately 11% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $12 $7,028M 82.4%
10-Year Growth $19 $9,637M 70.8%
5-Year EBITDA $8 $5,686M 78.3%
10-Year EBITDA $13 $7,594M 62.9%

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: 101.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.7%
  • Long-term growth rate: 1.0%
  • Fair value: $10.34 (4.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.9% (Low) to 5.6% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $5 to $12
  • Selected fair value: $7.75 (-21.8% 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 $365M
Discount Rate (WACC) 6.1% - 4.6%
Enterprise Value $5,953M - $7,936M
Net Debt $2,452M
Equity Value $3,501M - $5,484M
Outstanding Shares 382M
Fair Value $9 - $14
Selected Fair Value $10.98

Key Financial Metrics

Metric Value
Market Capitalization $3786M
Enterprise Value $6078M
Trailing P/E 20.20
Forward P/E 19.23
Trailing EV/EBITDA 5.95
Current Dividend Yield 500.27%
Dividend Growth Rate (5Y) 13.09%
Debt-to-Equity Ratio 0.61

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% $5.27
Discounted Cash Flow (5Y) 25% $2.80
Dividend Discount Model (Multi-Stage) 20% $2.07
Dividend Discount Model (Stable) 15% $1.16
Earnings Power Value 10% $1.10
Weighted Average 100% $12.39

Investment Conclusion

Based on our comprehensive valuation analysis, SIG Combibloc Group AG's intrinsic value is $12.39, which is approximately 25.1% above the current market price of $9.90.

Key investment considerations:

  • Strong projected earnings growth (6% to 6% margin)
  • Consistent cash flow generation
  • Historical dividend growth of 13.09%

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