DCF Studio

    ANTO.L · LSE · Basic Materials

    Antofagasta plc

    Also onConsensus Drift

    Implied value per share

    GBp 1942.24

    Market price

    GBp 3657.00

    Implied upside

    -46.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.7466

    AdjustedReports in USD, trades in GBp. Modelled in USD, converted at the end.
    AdjustedCapital expenditure runs at 36.2% of revenue against depreciation of 20.5%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 1942.24-46.9%
    Exit multiple
    GBp 3171.14-13.3%
    Market price
    GBp 3657.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 9.8bnUSD 11.1bnUSD 12.7bnUSD 14.4bnUSD 16.4bn+13.7%
    EBITUSD 3.0bnUSD 3.4bnUSD 3.8bnUSD 4.4bnUSD 5.0bn+13.7%
    NOPATUSD 2.2bnUSD 2.5bnUSD 2.9bnUSD 3.3bnUSD 3.7bn+13.7%
    Add depreciation & amortisationUSD 2.0bnUSD 2.3bnUSD 2.6bnUSD 3.0bnUSD 3.4bn+13.7%
    Less capital expenditureUSD -3.6bnUSD -4.0bnUSD -4.6bnUSD -5.2bnUSD -5.9bn+13.7%
    Less increase in working capitalUSD 84.4mUSD 95.9mUSD 109.1mUSD 124.1mUSD 141.1m-13.7%
    Free cashflow to firmUSD 772.6mUSD 878.6mUSD 999.1mUSD 1.1bnUSD 1.3bn+13.7%
    Discount factor0.95200.86270.78180.70850.6421-
    Present valueUSD 735.5mUSD 758.0mUSD 781.1mUSD 805.0mUSD 829.6m+3.1%
    Present Value Of The ForecastUSD 3.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.272Reported 1.406, pulled toward 1.0 (Blume)
    Cost of equity11.50%Risk-free + beta x equity risk premium
    Cost of debt5.97%Interest expense / average total debt
    Market capitalisationUSD 36.1bn83.6% of capital
    Total debtUSD 7.1bn16.4% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC10.34%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 26.01

    86% of EV

    Forecast FCFF, final year
    USD 1.3bn
    Capex at depreciation, working capital in reinvestment
    USD 3.7bn
    Less reinvestment at g/ROIC (23.7% of NOPAT)
    USD -883.1m
    Capitalised
    USD 2.8bn
    ROIC (reported)
    10.6%
    Terminal value, undiscounted
    USD 37.2bn
    Terminal value, discounted
    USD 23.9bn
    Enterprise value
    USD 27.8bn
    Less net debt
    USD 2.2bn
    Equity value
    USD 25.6bn

    Exit at 7.5x EBITDA

    Value per shareUSD 42.47

    91% of EV

    Terminal value, undiscounted
    USD 62.5bn
    Terminal value, discounted
    USD 40.1bn
    Enterprise value
    USD 44.0bn
    Less net debt
    USD 2.2bn
    Equity value
    USD 41.9bn

    Spread between methods: 48%.

    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%
    8.34%35.5436.3637.2938.3839.66
    9.34%29.9830.3730.8131.3031.85
    10.34%25.7025.8626.0126.1826.35
    11.34%22.5622.6622.7722.8722.97
    12.34%20.0320.1220.2120.3020.39

    Outlined: this model. Green text: above today's price of 48.98. 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 year13.7%28.6%+14.8pp
    EBIT margin30.4%49.9%+19.5pp
    Discount rate10.3%7.1%-3.2pp
    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.