What is VPBN.SW's Intrinsic value?

VP Bank AG (VPBN.SW) Intrinsic Value Analysis

Executive Summary

As of June 3, 2025, VP Bank AG's estimated intrinsic value ranges from $59.07 to $86.57 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $59.07 -29.5%
Dividend Discount Model (Stable) $86.57 +3.3%

Is VP Bank AG (VPBN.SW) undervalued or overvalued?

With the current market price at $83.80, the stock appears to be moderately overvalued.

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 VP Bank AG'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 1.0% 1.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.77 1.21
Cost of equity 4.9% 9.4%
Cost of debt 5.0% 5.0%
Tax rate 12.8% 14.3%
Debt/Equity ratio 0.41 0.41
After-tax WACC 4.7% 7.9%

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: 167.2%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.1%
  • Long-term growth rate: 2.0%
  • Fair value: $59.07 (-29.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.4% (Low) to 4.9% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $26 to $147
  • Selected fair value: $86.57 (3.3% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $504M
Enterprise Value $708M
Trailing P/E 27.27
Forward P/E 26.90
Trailing EV/EBITDA 0.00
Current Dividend Yield 616.28%
Dividend Growth Rate (5Y) -1.79%
Debt-to-Equity Ratio 0.41

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% $11.81
Dividend Discount Model (Stable) 43% $12.98
Weighted Average 100% $70.85

Investment Conclusion

Based on our comprehensive valuation analysis, VP Bank AG's weighted average intrinsic value is $70.85, which is approximately 15.5% below the current market price of $83.80.

Key investment considerations:

  • Overall financial health and market position

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