DCF Studio

    AMT · NYQ · Real Estate

    American Tower Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 40.43

    Market price

    USD 173.98

    Implied upside

    -76.8%

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

    Value Per Share

    Perpetuity growth
    USD 40.43-76.8%
    Exit multiple
    USD 171.96-1.2%
    Market price
    USD 173.98

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn5bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 11.0bnUSD 11.4bnUSD 11.7bnUSD 12.1bnUSD 12.5bn+3.3%
    EBITUSD 4.3bnUSD 4.5bnUSD 4.6bnUSD 4.8bnUSD 4.9bn+3.3%
    NOPATUSD 4.0bnUSD 4.1bnUSD 4.3bnUSD 4.4bnUSD 4.5bn+3.3%
    Add depreciation & amortisationUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+3.3%
    Less capital expenditureUSD -1.9bnUSD -2.0bnUSD -2.0bnUSD -2.1bnUSD -2.2bn+3.3%
    Less increase in working capitalUSD -355.6mUSD -367.4mUSD -379.7mUSD -392.4mUSD -405.5m+3.3%
    Free cashflow to firmUSD 4.6bnUSD 4.8bnUSD 5.0bnUSD 5.1bnUSD 5.3bn+3.3%
    Discount factor0.96160.88920.82220.76030.7031-
    Present valueUSD 4.5bnUSD 4.3bnUSD 4.1bnUSD 3.9bnUSD 3.7bn-4.4%
    Present Value Of The ForecastUSD 20.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.930Reported 0.895, pulled toward 1.0 (Blume)
    Cost of equity10.11%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 81.1bn64.3% of capital
    Total debtUSD 45.0bn35.7% of capital, book value as a proxy
    Tax rate8.0%Effective, capped at statutory
    WACC8.14%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 shareUSD 40.43

    67% of EV

    Forecast FCFF, final year
    USD 5.3bn
    Capex at depreciation, working capital in reinvestment
    USD 4.5bn
    Less reinvestment at g/ROIC (27.5% of NOPAT)
    USD -1.2bn
    Capitalised
    USD 3.3bn
    ROIC (reported)
    9.1%
    Terminal value, undiscounted
    USD 59.8bn
    Terminal value, discounted
    USD 42.0bn
    Enterprise value
    USD 62.4bn
    Less net debt
    USD 43.5bn
    Equity value
    USD 19.0bn

    Exit at 17.9x EBITDA

    Value per shareUSD 171.96

    84% of EV

    Terminal value, undiscounted
    USD 147.5bn
    Terminal value, discounted
    USD 103.7bn
    Enterprise value
    USD 124.1bn
    Less net debt
    USD 43.5bn
    Equity value
    USD 80.6bn

    Spread between methods: 124%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.14%87.9694.99103.83115.36131.09
    7.14%58.3861.5865.3870.0075.79
    8.14%37.6438.9540.4342.1344.11
    9.14%22.3422.7023.0623.4223.77
    10.14%11.6511.9612.2712.5812.89

    Outlined: this model. Green text: above today's price of 173.98. 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 year3.3%23.6%+20.3pp
    EBIT margin39.3%80.7%+41.4pp
    Discount rate8.1%5.1%-3.0pp
    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.