DCF Studio

    APE.AX · ASX · Consumer Cyclical

    Eagers Automotive Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 26.92

    Market price

    AUD 19.52

    Implied upside

    +37.9%

    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 26.92+37.9%
    Exit multiple
    AUD 40.83+109.2%
    Market price
    AUD 19.52

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m96m192mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayAUD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueAUD 15.0bnAUD 17.3bnAUD 19.9bnAUD 22.9bnAUD 26.4bn+15.2%
    EBITAUD 760.2mAUD 875.5mAUD 1.0bnAUD 1.2bnAUD 1.3bn+15.2%
    NOPATAUD 532.1mAUD 612.8mAUD 705.7mAUD 812.7mAUD 936.0m+15.2%
    Add depreciation & amortisationAUD 190.4mAUD 219.2mAUD 252.5mAUD 290.8mAUD 334.8m+15.2%
    Less capital expenditureAUD -180.2mAUD -207.5mAUD -239.0mAUD -275.2mAUD -316.9m+15.2%
    Less increase in working capitalAUD -432.9mAUD -498.5mAUD -574.1mAUD -661.2mAUD -761.4m+15.2%
    Free cashflow to firmAUD 109.4mAUD 126.0mAUD 145.1mAUD 167.1mAUD 192.5m+15.2%
    Discount factor0.96110.88770.81990.75730.6995-
    Present valueAUD 105.2mAUD 111.9mAUD 119.0mAUD 126.6mAUD 134.6m+6.4%
    Present Value Of The ForecastAUD 597.2m

    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
    Beta0.905Reported 0.858, pulled toward 1.0 (Blume)
    Cost of equity10.78%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 5.5bn64.3% of capital
    Total debtAUD 3.1bn35.7% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.27%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 26.92

    94% of EV

    Forecast FCFF, final year
    AUD 192.5m
    Capex at depreciation, working capital in reinvestment
    AUD 936.0m
    Less reinvestment at g/ROIC (22.2% of NOPAT)
    AUD -207.5m
    Capitalised
    AUD 728.4m
    ROIC (reported)
    11.3%
    Terminal value, undiscounted
    AUD 12.9bn
    Terminal value, discounted
    AUD 9.1bn
    Enterprise value
    AUD 9.7bn
    Less net debt
    AUD 2.6bn
    Equity value
    AUD 7.1bn

    Exit at 10.9x EBITDA

    Value per shareAUD 40.83

    96% of EV

    Terminal value, undiscounted
    AUD 18.2bn
    Terminal value, discounted
    AUD 12.7bn
    Enterprise value
    AUD 13.3bn
    Less net debt
    AUD 2.6bn
    Equity value
    AUD 10.7bn

    Spread between methods: 41%.

    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%
    6.27%42.6345.9050.0155.3462.55
    7.27%32.1633.9136.0038.5641.77
    8.27%24.8525.8126.9228.2229.76
    9.27%19.4619.9820.5621.2221.97
    10.27%15.3515.6115.8816.1916.52

    Outlined: this model. Green text: above today's price of 19.52. 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 year15.2%7.1%-8.1pp
    EBIT margin5.1%4.2%-0.8pp
    Discount rate8.3%9.5%+1.2pp
    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.