Sanofi (SNY) — DCF Valuation

SNY trades at $48.66, within 10% of our $54.57 intrinsic value estimate. At 9.5% WACC and 13.9% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $35.53 (bear) to $82.24 (bull).

Using a 5-year DCF model: Base FCF of $8.89B, projected at 13.9% 5Y CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $14.13B net debt and dividing by 2.44B shares: Bear $35.53 | Base $54.57 | Bull $82.24. Current price $48.66 implies +13% to base case.

DCF Methodology:

① Project FCF years 1-5 using 13.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($147.32B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 16.6x.