DCF Studio

    APTV · NYQ · Consumer Cyclical

    Aptiv PLC

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 104.09

    Market price

    USD 43.59

    Implied upside

    +138.8%

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

    Value Per Share

    Perpetuity growth
    USD 104.09+138.8%
    Exit multiple
    USD 64.32+47.6%
    Market price
    USD 43.59

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 21.5bnUSD 22.6bnUSD 23.8bnUSD 25.0bnUSD 26.4bn+5.3%
    EBITUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bn+5.3%
    NOPATUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bn+5.3%
    Add depreciation & amortisationUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bn+5.3%
    Less capital expenditureUSD -900.2mUSD -947.6mUSD -997.5mUSD -1.0bnUSD -1.1bn+5.3%
    Less increase in working capitalUSD -193.7mUSD -203.9mUSD -214.7mUSD -226.0mUSD -237.8m+5.3%
    Free cashflow to firmUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bn+5.3%
    Discount factor0.96110.88780.82010.75760.6998-
    Present valueUSD 1.6bnUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.4bn-2.8%
    Present Value Of The ForecastUSD 7.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.221Reported 1.330, pulled toward 1.0 (Blume)
    Cost of equity11.71%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 9.1bn52.8% of capital
    Total debtUSD 8.1bn47.2% of capital, book value as a proxy
    Tax rate12.2%Effective, capped at statutory
    WACC8.26%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 104.09

    74% of EV

    Forecast FCFF, final year
    USD 2.0bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (26.1% of NOPAT)
    USD -616.5m
    Capitalised
    USD 1.7bn
    ROIC (reported)
    9.6%
    Terminal value, undiscounted
    USD 31.1bn
    Terminal value, discounted
    USD 21.8bn
    Enterprise value
    USD 29.2bn
    Less net debt
    USD 6.2bn
    Equity value
    USD 23.0bn

    Exit at 5.1x EBITDA

    Value per shareUSD 64.32

    64% of EV

    Terminal value, undiscounted
    USD 18.6bn
    Terminal value, discounted
    USD 13.0bn
    Enterprise value
    USD 20.4bn
    Less net debt
    USD 6.2bn
    Equity value
    USD 14.2bn

    Spread between methods: 47%.

    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%
    6.25%153.75161.60171.43184.16201.34
    7.26%122.45126.22130.70136.13142.91
    8.25%100.42102.14104.09106.34108.98
    9.25%84.0884.6985.3486.0386.78
    10.26%72.2972.6372.9773.3073.64

    Outlined: this model. Green text: above today's price of 43.59. 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 year5.3%-11.2%-16.5pp
    EBIT margin9.2%4.7%-4.5pp
    Discount rate8.3%14.3%+6.0pp
    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.