EPIC Suisse (SWX:EPIC): Reassessing Valuation After Its CHF 70 Million Follow-On Equity Offering

EPIC Suisse (SWX:EPIC) has just wrapped up a CHF 70 million follow on equity offering at about CHF 80 a share. This deal could subtly reset how investors think about its valuation.

See our latest analysis for EPIC Suisse.

Despite the modest discount to the CHF 80 offer price, the current CHF 81.8 share price and flat year to date share price return sit alongside a much stronger 1 year total shareholder return of 9.7 percent and robust 3 year total shareholder return of 53.9 percent. This suggests that near term momentum has cooled even as long term holders have done well.

If this capital raise has you rethinking your portfolio’s real estate exposure, it could be a good moment to explore fast growing stocks with high insider ownership as potential next ideas.

With EPIC Suisse now trading just above its offer price after years of strong total returns, the key question is whether investors are overlooking latent value or whether the latest capital raise means future growth is already priced in.

Price-To-Earnings of 15.5x: Is it justified?

EPIC Suisse trades on a 15.5x price to earnings ratio, slightly above both Swiss and European real estate peers even after the latest equity raise.

The price to earnings multiple compares today’s share price with the company’s per share earnings, which is a common way to benchmark income generating real estate stocks.

At 15.5x earnings, investors are paying more than the 13.7x peer average and the 14.5x wider European real estate average, which implies the market is willing to ascribe a premium to EPIC Suisse despite its longer term earnings decline of 7.3 percent per year over five years and only recently improved profit margins that were boosted by one off gains.

Compared with the broader Swiss market on 19.3x, EPIC Suisse still screens cheaper in absolute terms. However, relative to its direct real estate peers, the higher multiple signals that expectations for earnings stability or asset quality are more optimistic than for the sector as a whole.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 15.5x (OVERVALUED)

However, downside risks remain, including weaker Swiss commercial property demand or higher rates compressing valuations and limiting rental growth for EPIC Suisse’s portfolio.

Find out about the key risks to this EPIC Suisse narrative.

Another View: DCF Says the Shares Look Pricey Too

Our DCF model points in the same direction as the earnings multiple, suggesting EPIC Suisse is trading above fair value, with the share price around CHF 81.8 versus an estimated fair value of about CHF 70.64. If both lenses flag limited upside, what is the market really paying up for?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out EPIC Suisse for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 901 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own EPIC Suisse Narrative

If you want to dig into the numbers yourself and stress test these assumptions, you can build a complete narrative in just a few minutes. Do it your way.

A great starting point for your EPIC Suisse research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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