DCF Studio

    ALL.AX · ASX · Consumer Cyclical

    Aristocrat Leisure Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 25.28

    Market price

    AUD 60.77

    Implied upside

    -58.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Value Per Share

    Perpetuity growth
    AUD 25.28-58.4%
    Exit multiple
    AUD 53.01-12.8%
    Market price
    AUD 60.77

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 6.6bnAUD 6.8bnAUD 7.1bnAUD 7.4bnAUD 7.7bn+4.2%
    EBITAUD 1.4bnAUD 1.4bnAUD 1.5bnAUD 1.6bnAUD 1.6bn+4.2%
    NOPATAUD 1.1bnAUD 1.1bnAUD 1.1bnAUD 1.2bnAUD 1.2bn+4.2%
    Add depreciation & amortisationAUD 596.9mAUD 621.7mAUD 647.5mAUD 674.4mAUD 702.3m+4.2%
    Less capital expenditureAUD -439.0mAUD -457.2mAUD -476.2mAUD -495.9mAUD -516.5m+4.2%
    Less increase in working capitalAUD -32.8mAUD -34.2mAUD -35.6mAUD -37.1mAUD -38.6m+4.2%
    Free cashflow to firmAUD 1.2bnAUD 1.2bnAUD 1.3bnAUD 1.3bnAUD 1.4bn+4.2%
    Discount factor0.95960.88370.81380.74940.6901-
    Present valueAUD 1.1bnAUD 1.1bnAUD 1.0bnAUD 998.2mAUD 957.4m-4.1%
    Present Value Of The ForecastAUD 5.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.569Reported 0.356, pulled toward 1.0 (Blume)
    Cost of equity8.76%Risk-free + beta x equity risk premium
    Cost of debt7.38%Interest expense / average total debt
    Market capitalisationAUD 36.1bn94.7% of capital
    Total debtAUD 2.0bn5.3% of capital, book value as a proxy
    Tax rate23.7%Effective, capped at statutory
    WACC8.59%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareAUD 25.28

    69% of EV

    Forecast FCFF, final year
    AUD 1.4bn
    Capex at depreciation, working capital in reinvestment
    AUD 1.2bn
    Less reinvestment at g/ROIC (21.0% of NOPAT)
    AUD -259.8m
    Capitalised
    AUD 980.3m
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    AUD 16.5bn
    Terminal value, discounted
    AUD 11.4bn
    Enterprise value
    AUD 16.6bn
    Less net debt
    AUD 738.8m
    Equity value
    AUD 15.9bn

    Exit at 17.9x EBITDA

    Value per shareAUD 53.01

    85% of EV

    Terminal value, undiscounted
    AUD 41.7bn
    Terminal value, discounted
    AUD 28.8bn
    Enterprise value
    AUD 34.0bn
    Less net debt
    AUD 738.8m
    Equity value
    AUD 33.3bn

    Spread between methods: 71%.

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.59%33.3734.9436.8939.3542.60
    7.59%28.0428.9129.9531.2032.74
    8.59%24.2024.7025.2825.9426.73
    9.59%21.3121.5921.9122.2622.67
    10.59%19.0419.2019.3619.5419.74

    Outlined: this model. Green text: above today's price of 60.77. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year4.2%26.8%+22.6pp
    EBIT margin21.1%50.3%+29.2pp
    Discount rate8.6%4.9%-3.7pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.