Keyence

DCF to market -31.5% (tolerance 15.0%). The steady state after the ten-year fade at the common discount rate: a WACC of 9.34 per cent (beta 1, the 5.14 per cent premium on the 2.817 per cent JGB yield, the net cash weighted with its sign) w: The DCF equity value, 12.45 trillion yen at the snapshot, is 5.71 trillion yen (31.5 per cent) below the 18.16 trillion market capitalisation; the market's enterprise value at the valuation date is 15.30 trillion yen against the model's 9.42 trillion. At the model's WACC the market prices in residual operating income growing 6.54 per cent a year forever after FY2042, against 1.9 per cent; read as a steady state from FY2028, it implies a WACC of 5.84 per cent. A WACC near 6.6 per cent closes the gap at 1.9 per cent growth (the model re-run at 6.5 and 6.7 per cent: +1.28 and -2.30 per cent). The

Residual income to market -31.1% (tolerance 15.0%). The residual income's steady state: FY2042's residual operating income growing at the 1.9 per cent long-run nominal GDP growth, at the 9.34 per cent WACC (Valuation / RI continuing value).: The residual-income equity value, 12.52 trillion yen at the snapshot, is 5.65 trillion yen (31.1 per cent) below the market capitalisation, and 0.53 per cent above the DCF's. The market's enterprise value leaves a continuing value at FY2042 of 34.68 trillion yen against the model's 12.47 trillion: residual operating income growing 6.54 per cent a year after FY2042, instead of 1.9 per cent, closes the gap. A WACC near 6.6 per cent also closes it (the model re-run at 6.5 and 6.7 per cent: +2.15 and -1.49 per cent). With every tagged driver at its bull value, residual income gives 17.27 trillion