SED Energy is a small Norwegian energy/power-services company earning a ~10% adjusted ROIC — above the 8% WACC — with positive economic profit (+NOK 70M), a high free-cash yield (10.6%) and healthy EBIT margins (~29%). It is one of the few genuinely value-creating names in this slice.
The equity at NOK 8.5 embeds ~5.7% perpetual growth (reverse-DCF), with fair value ~26% below. Above-WACC returns and cash generation are the support; the valuation prices continued growth.
Bridging adjusted NOPAT through net debt, reverse-DCF fair value runs NOK 6.1–6.9 across scenarios — below the NOK 8.5 price (~5.7% implied growth). Above-WACC returns justify a premium, but the equity is fully valued.
Base NOK 8.5 (flat); bull NOK 11 (energy demand + margin); bear NOK 6 (energy-price/volume weakness).
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~9.4%, limited by ROIC 10% ≈ WACC 8%) it cannot reach the current EV. No-growth value is NOK 6/share (72% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 11 | ≥9% | +31% | 30% | Energy demand + margin |
| Base | NOK 8 | ≥9% | +2% | 45% | Above-WACC returns; full valuation |
| Bear | NOK 6 | -1% | -28% | 25% | Energy-price/volume weakness |
| Prob-weighted | NOK 9 | — | +3% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 8 | 9 | 9 | 10 | 10 | 12 |
| 7.25% | 7 | 7 | 8 | 8 | 8 | 9 |
| 8.00% (base) | 6 | 6 | 7 | 7 | 7 | 7 |
| 8.75% | 5 | 5 | 6 | 6 | 6 | 6 |
| 9.50% | 5 | 5 | 5 | 5 | 5 | 5 |
Green = fair value above the current price of NOK 8.37. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
~10% ROIC vs 8% WACC with positive economic profit — genuine value creation.
10.6% FCF yield supports distributions.
~29% EBIT margins for an energy/power business.
Power/energy-services demand has structural support.
Runway for continued expansion.
SED Energy is a small, genuinely value-creating Norwegian energy business at a full price. HOLD, medium conviction; base target NOK 8.5 (flat).
Energy demand plus margins is the upside; price/volume weakness is the principal risk.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: Not available from structured data
Company add-backs we reject: Not available without footnote extraction
Pages read — FY: — · Q: —
How the mttssn view has evolved — each prior dated note is preserved.