DCF Studio

    AMP.AX · ASX · Financial Services

    AMP Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD -8.83

    Market price

    AUD 2.52

    Implied upside

    -450.4%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    AUD -8.83-450.4%
    Exit multiple
    AUD -9.03-458.4%
    Market price
    AUD 2.52

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -89094037-445470190FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 735.7mAUD 622.9mAUD 527.3mAUD 446.5mAUD 378.0m-15.3%
    EBITAUD -199.0mAUD -168.5mAUD -142.6mAUD -120.8mAUD -102.2m+15.3%
    NOPATAUD -139.3mAUD -117.9mAUD -99.8mAUD -84.5mAUD -71.6m+15.3%
    Add depreciation & amortisationAUD 51.8mAUD 43.9mAUD 37.1mAUD 31.4mAUD 26.6m-15.3%
    Less capital expenditureAUD -33.9mAUD -28.7mAUD -24.3mAUD -20.6mAUD -17.4m-15.3%
    Less increase in working capitalAUD 32.3mAUD 27.3mAUD 23.1mAUD 19.6mAUD 16.6m+15.3%
    Free cashflow to firmAUD -89.1mAUD -75.4mAUD -63.9mAUD -54.1mAUD -45.8m+15.3%
    Discount factor0.98180.94640.91220.87930.8476-
    Present valueAUD -87.5mAUD -71.4mAUD -58.3mAUD -47.5mAUD -38.8m+18.4%
    Present Value Of The ForecastAUD -303.4m

    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
    Beta0.581Reported 0.374, pulled toward 1.0 (Blume)
    Cost of equity8.83%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 0.000.0% of capital
    Total debtAUD 29.6bn100.0% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC3.74%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 -8.83

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD -303.4m
    Less net debt
    AUD 22.3bn
    Equity value
    AUD -22.6bn

    Exit at 8.0x EBITDA

    Value per shareAUD -9.03

    63% of EV

    Terminal value, undiscounted
    AUD -604.9m
    Terminal value, discounted
    AUD -512.7m
    Enterprise value
    AUD -816.1m
    Less net debt
    AUD 22.3bn
    Equity value
    AUD -23.1bn

    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%
    1.74%-8.84————
    2.74%-8.83-8.83-8.83——
    3.74%-8.83-8.83-8.83-8.83-8.83
    4.74%-8.83-8.83-8.83-8.83-8.83
    5.74%-8.83-8.83-8.83-8.83-8.83

    Outlined: this model. Green text: above today's price of 2.52. Shading: distance from this model's own value.

    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.