ERIC-B.ST
Ericsson, Telefonab. L M ser. BOpenERIC-B.ST discounted cash flow valuation
ERIC-B.ST Fair Value
Reverse DCF: today's price implies -10.8% a year of FCF growth for years 1–5, against 4.1% in this model.
Model: 4.1% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 7.48% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | SEK 248.51B |
|---|---|
| PV of terminal value (63% of EV) | SEK 425.18B |
| Enterprise value | SEK 673.69B |
| + Cash & investments | SEK 54.10B |
| − Total debt | −SEK 39.48B |
| Equity value | SEK 688.32B |
| ÷ Shares outstanding | 2.98B |
| Value per share | SEK 230.69 |
| Market cap | SEK 313.97B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.51 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 7.77% |
| Pre-tax cost of debt | 6.89% |
| Tax rate | 25.0% |
| Debt / (equity + debt) | 11.2% |
| WACC | 7.48% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.48% | 303.19 | 337.88 | 384.21 | 449.20 | 547.00 |
| 6.48% | 242.30 | 262.67 | 288.14 | 320.93 | 364.70 |
| 7.48% | 201.82 | 214.94 | 230.69 | 249.94 | 274.03 |
| 8.48% | 172.97 | 181.97 | 192.47 | 204.88 | 219.78 |
| 9.48% | 151.38 | 157.84 | 165.23 | 173.75 | 183.69 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (TTM) | — | SEK 29.78B | — | — |
| Year 1 | 4.1% | SEK 31.01B | 0.930 | SEK 28.85B |
| Year 2 | 4.1% | SEK 32.28B | 0.866 | SEK 27.94B |
| Year 3 | 4.1% | SEK 33.60B | 0.805 | SEK 27.06B |
| Year 4 | 4.1% | SEK 34.98B | 0.749 | SEK 26.21B |
| Year 5 | 4.1% | SEK 36.41B | 0.697 | SEK 25.39B |
| Year 6 | 3.8% | SEK 37.79B | 0.649 | SEK 24.51B |
| Year 7 | 3.5% | SEK 39.10B | 0.604 | SEK 23.60B |
| Year 8 | 3.1% | SEK 40.32B | 0.562 | SEK 22.64B |
| Year 9 | 2.8% | SEK 41.46B | 0.522 | SEK 21.66B |
| Year 10 | 2.5% | SEK 42.50B | 0.486 | SEK 20.66B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.