UPMMY
UPM-Kymmene Oyj
$29.10
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 16.2% above fair value
You pay
$29.10
Bear
$20.03
Fair
$25.04
Bull
$30.05
Bear
$20.03
-31.2%
$1.67 × 12x P/E
Fair
$25.04
-13.9%
$1.67 × 15x P/E
Bull
$30.05
+3.3%
$1.67 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
17.4x
Summary
Applying a 15x P/E to adjusted EPS of $1.67, the base-case value is $25.04 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 327% 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 118%). Large gaps may signal the dividend doesn't reflect full earning power.
Financial statements were converted from EUR into USD using EURUSD at 1.1625 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