Lindex Group (the former Stockmann) combines the Lindex fashion-retail chain with department-store operations. Despite restructuring, the group earns below its cost of capital — adjusted ROIC of 6.1% against an 8% WACC — and destroys economic value (−€19M economic profit).
The screen's middling valuation score misses that the reverse-DCF equity value falls below €1 at every growth assumption (a negative implied growth signals the market already prices decline). Fashion retail with sub-WACC returns is a value-trap, not value.
Capitalising adjusted NOPAT and bridging through net debt leaves an implied equity value below €1 across scenarios — well under the €2.19 price. With negative economic profit and a structurally challenged fashion-retail/department-store model, the equity is the riskiest claim.
Base €1.70 (−22%, de-rate toward distressed economics); bull €2.80 (a genuine retail turnaround or department-store divestiture restores returns); bear €1.20 (continued margin pressure and competition).
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 5% ≈ WACC 8%) it cannot reach the current EV. No-growth value is €-1/share (-40% 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 | €3 | ≥-50% | +26% | 25% | Retail turnaround / department-store divestiture |
| Base | €2 | ≥-50% | -23% | 40% | De-rate toward distressed economics |
| Bear | €1 | ≥-50% | -46% | 35% | Continued margin pressure + competition |
| Prob-weighted | €2 | — | -19% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | -0 | -0 | -1 | -1 | -2 | -3 |
| 7.25% | -1 | -1 | -1 | -2 | -2 | -4 |
| 8.00% (base) | -1 | -1 | -2 | -2 | -3 | -4 |
| 8.75% | -1 | -2 | -2 | -3 | -3 | -5 |
| 9.50% | -1 | -2 | -2 | -3 | -3 | -5 |
Green = fair value above the current price of €2.22. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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A successful Lindex turnaround or department-store divestiture could restore returns — the bull path.
The Lindex fashion brand retains some equity and a loyal Nordic customer base.
Cost actions and portfolio simplification could lift ROIC toward WACC.
Reported free cash flow is positive (10% yield), the main support for the equity.
Some residual real-estate/asset value beneath the equity.
Lindex Group earns below its cost of capital with negative economic profit and a reverse-DCF equity value below €1 — a value-trap despite an unremarkable screen score. SELL/Avoid, medium conviction; base target €1.70 (−22%).
Only a genuine turnaround that pushes returns above WACC, or value-crystallising divestiture, would change the thesis.
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.