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    APH · NYQ · Technology

    Amphenol Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 74.09

    Market price

    USD 77.55

    Implied upside

    -4.5%

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

    Current EV/EBITDA of 28.3x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 74.09-4.5%
    Exit multiple
    USD 177.44+128.8%
    Market price
    USD 77.55

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn10bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 28.2bnUSD 34.5bnUSD 42.3bnUSD 51.7bnUSD 63.2bn+22.3%
    EBITUSD 6.3bnUSD 7.7bnUSD 9.4bnUSD 11.5bnUSD 14.0bn+22.3%
    NOPATUSD 5.0bnUSD 6.1bnUSD 7.4bnUSD 9.1bnUSD 11.1bn+22.3%
    Add depreciation & amortisationUSD 996.0mUSD 1.2bnUSD 1.5bnUSD 1.8bnUSD 2.2bn+22.3%
    Less capital expenditureUSD -1.0bnUSD -1.3bnUSD -1.6bnUSD -1.9bnUSD -2.3bn+22.3%
    Less increase in working capitalUSD -436.6mUSD -534.0mUSD -653.1mUSD -798.7mUSD -976.9m+22.3%
    Free cashflow to firmUSD 4.5bnUSD 5.5bnUSD 6.7bnUSD 8.2bnUSD 10.0bn+22.3%
    Discount factor0.94990.85700.77330.69770.6295-
    Present valueUSD 4.2bnUSD 4.7bnUSD 5.2bnUSD 5.7bnUSD 6.3bn+10.4%
    Present Value Of The ForecastUSD 26.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.162Reported 1.242, pulled toward 1.0 (Blume)
    Cost of equity11.39%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 191.2bn92.5% of capital
    Total debtUSD 15.5bn7.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.83%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 74.09

    74% of EV

    Forecast FCFF, final year
    USD 10.0bn
    Capex at depreciation, working capital in reinvestment
    USD 11.1bn
    Less reinvestment at g/ROIC (15.4% of NOPAT)
    USD -1.7bn
    Capitalised
    USD 9.4bn
    ROIC (reported)
    16.2%
    Terminal value, undiscounted
    USD 115.3bn
    Terminal value, discounted
    USD 72.6bn
    Enterprise value
    USD 98.7bn
    Less net debt
    USD 4.1bn
    Equity value
    USD 94.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 177.44

    89% of EV

    Terminal value, undiscounted
    USD 325.1bn
    Terminal value, discounted
    USD 204.6bn
    Enterprise value
    USD 230.8bn
    Less net debt
    USD 4.1bn
    Equity value
    USD 226.7bn

    Spread between methods: 82%.

    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%
    8.83%92.7695.8799.46103.62108.53
    9.83%80.6582.7185.0387.6790.69
    10.83%71.1672.5574.0975.8077.72
    11.83%63.5364.4765.5066.6367.87
    12.83%57.2657.9058.5959.3360.13

    Outlined: this model. Green text: above today's price of 77.55. 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 year22.3%23.5%+1.2pp
    EBIT margin22.2%23.2%+1.0pp
    Discount rate10.8%10.5%-0.3pp
    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.