DCF Studio

    ASB.AX · ASX · Industrials

    Austal Limited

    Also onConsensus Drift

    Implied value per share

    AUD -3.02

    Market price

    AUD 4.64

    Implied upside

    -165.1%

    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.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 10.3% of revenue against depreciation of 4.0%. 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.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    AUD -3.02-165.1%
    Exit multiple
    AUD -3.64-178.5%
    Market price
    AUD 4.64

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -376762629-1883813150FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 2.2bnAUD 2.4bnAUD 2.6bnAUD 2.8bnAUD 3.1bn+8.6%
    EBITAUD -121.5mAUD -132.0mAUD -143.3mAUD -155.6mAUD -168.9m-8.6%
    NOPATAUD -85.1mAUD -92.4mAUD -100.3mAUD -108.9mAUD -118.2m-8.6%
    Add depreciation & amortisationAUD 87.1mAUD 94.6mAUD 102.7mAUD 111.6mAUD 121.1m+8.6%
    Less capital expenditureAUD -226.0mAUD -245.4mAUD -266.4mAUD -289.3mAUD -314.1m+8.6%
    Less increase in working capitalAUD -47.2mAUD -51.2mAUD -55.6mAUD -60.4mAUD -65.6m+8.6%
    Free cashflow to firmAUD -271.1mAUD -294.3mAUD -319.6mAUD -347.0mAUD -376.8m-8.6%
    Discount factor0.95850.88060.80900.74320.6828-
    Present valueAUD -259.8mAUD -259.2mAUD -258.5mAUD -257.9mAUD -257.2m+0.2%
    Present Value Of The ForecastAUD -1.3bn

    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
    Beta0.678Reported 0.520, pulled toward 1.0 (Blume)
    Cost of equity9.42%Risk-free + beta x equity risk premium
    Cost of debt7.24%Interest expense / average total debt
    Market capitalisationAUD 2.0bn86.9% of capital
    Total debtAUD 294.7m13.1% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.85%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 -3.02

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD -1.3bn
    Less net debt
    AUD -17.2m
    Equity value
    AUD -1.3bn

    Exit at 8.0x EBITDA

    Value per shareAUD -3.64

    17% of EV

    Terminal value, undiscounted
    AUD -382.4m
    Terminal value, discounted
    AUD -261.1m
    Enterprise value
    AUD -1.6bn
    Less net debt
    AUD -17.2m
    Equity value
    AUD -1.5bn

    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%
    6.85%-3.17-3.17-3.17-3.17-3.17
    7.85%-3.09-3.09-3.09-3.09-3.09
    8.85%-3.02-3.02-3.02-3.02-3.02
    9.85%-2.95-2.95-2.95-2.95-2.95
    10.85%-2.89-2.89-2.89-2.89-2.89

    Outlined: this model. Green text: above today's price of 4.64. 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
    EBIT margin-5.5%11.6%+17.2pp
    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.