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European Earnings Are Pricing in Tariff Risks, Says BlackRock's Jewell

European Earnings Are Pricing in Tariff Risks, Says BlackRock's Jewell

Bloomberg5 days ago
The outlook for European earnings is appropriately reflecting tariff risks, according to BlackRock Inc.'s Helen Jewell, who sees the rally extending in the absence of a trade shock.
'Earnings numbers have already come down; that's not a complacent market,' Jewell, chief investment officer of fundamental equities EMEA at the asset manager, said in an interview. 'The gains have further to go as long as the European exporters pull their weight.'
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Koninklijke BAM Groep First Half 2025 Earnings: EPS: €0.39 (vs €0.20 in 1H 2024)
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time41 minutes ago

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Koninklijke BAM Groep First Half 2025 Earnings: EPS: €0.39 (vs €0.20 in 1H 2024)

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Estimating The Intrinsic Value Of adesso SE (ETR:ADN1)
Estimating The Intrinsic Value Of adesso SE (ETR:ADN1)

Yahoo

time41 minutes ago

  • Yahoo

Estimating The Intrinsic Value Of adesso SE (ETR:ADN1)

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Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Step By Step Through The Calculation We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (€, Millions) €26.5m €45.5m €45.5m €45.8m €46.1m €46.5m €47.0m €47.5m €48.0m €48.6m Growth Rate Estimate Source Analyst x1 Analyst x2 Est @ 0.17% Est @ 0.50% Est @ 0.73% Est @ 0.89% Est @ 1.01% Est @ 1.08% Est @ 1.14% Est @ 1.18% Present Value (€, Millions) Discounted @ 8.1% €24.5 €38.9 €36.0 €33.5 €31.2 €29.1 €27.2 €25.5 €23.8 €22.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = €292m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 1.3%. We discount the terminal cash flows to today's value at a cost of equity of 8.1%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = €49m× (1 + 1.3%) ÷ (8.1%– 1.3%) = €721m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €721m÷ ( 1 + 8.1%)10= €331m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €623m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of €87.1, the company appears about fair value at a 11% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Important Assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at adesso as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.1%, which is based on a levered beta of 1.577. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for adesso SWOT Analysis for adesso Strength Debt is well covered by cash flow. Dividends are covered by earnings and cash flows. Weakness Interest payments on debt are not well covered. Dividend is low compared to the top 25% of dividend payers in the IT market. Opportunity Annual earnings are forecast to grow faster than the German market. Current share price is below our estimate of fair value. Threat Revenue is forecast to grow slower than 20% per year. Looking Ahead: Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For adesso, there are three relevant aspects you should further research: Risks: To that end, you should be aware of the 1 warning sign we've spotted with adesso . Future Earnings: How does ADN1's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the XTRA every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

CGTN: President Xi Jinping calls on China, EU to provide more stability, certainty for world
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timean hour ago

  • Business Upturn

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