What is TFBANK.ST's Intrinsic value?

TF Bank AB (TFBANK.ST) Intrinsic Value Analysis

Executive Summary

As of May 27, 2025, TF Bank AB's estimated intrinsic value ranges from $471.68 to $811.14 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $811.14 +117.8%
Dividend Discount Model (Stable) $471.68 +26.6%

Is TF Bank AB (TFBANK.ST) undervalued or overvalued?

With the current market price at $372.50, 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 TF Bank AB's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

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 0.51 0.71
Cost of equity 5.1% 7.8%
Cost of debt 5.0% 5.0%
Tax rate 21.4% 21.7%
Debt/Equity ratio 0.05 0.05
After-tax WACC 5.1% 7.6%

Valuation Methods

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: 6.5%
  • Long-term growth rate: 0.5%
  • Fair value: $811.14 (117.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 7.8% (Low) to 5.1% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $275 to $669
  • Selected fair value: $471.68 (26.6% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $8027M
Enterprise Value $8373M
Trailing P/E 12.13
Forward P/E 10.47
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -100.00%
Debt-to-Equity Ratio 0.05

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
Dividend Discount Model (Multi-Stage) 57% $162.23
Dividend Discount Model (Stable) 43% $70.75
Weighted Average 100% $665.66

Investment Conclusion

Based on our comprehensive valuation analysis, TF Bank AB's weighted average intrinsic value is $665.66, which is approximately 78.7% above the current market price of $372.50.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.05)

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