UPMMY
UPM-Kymmene Oyj
$27.61
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 14.0% above fair value
You pay
$27.61
Bear
$19.38
Fair
$24.23
Bull
$29.08
Bear
$19.38
-29.8%
$1.62 × 12x P/E
Fair
$24.23
-12.2%
$1.62 × 15x P/E
Bull
$29.08
+5.3%
$1.62 × 18x P/E
Adjust Assumptions
15.0x
1.62$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
17.1x
Summary
Applying a 15x P/E to adjusted EPS of $1.62, the base-case value is $24.23 per share. DDM cross-check: $54.54.
Warnings
The company's reported profits differ from official accounting profits by 58%. Check what costs are being left out of the adjusted number.
The company pays out 338% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $54.54 (above our primary estimate by 125%). Large gaps may signal the dividend doesn't reflect full earning power.
Financial statements were converted from EUR into USD using EURUSD at 1.1249 USD per EUR.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples