DCF Studio

    ATD.TO · TOR · Consumer Cyclical

    Alimentation Couche-Tard Inc.

    Also onConsensus Drift

    Implied value per share

    CAD 77.09

    Market price

    CAD 79.02

    Implied upside

    -2.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 77.09-2.4%
    Exit multiple
    CAD 97.42+23.3%
    Market price
    CAD 79.02

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 78.1bnUSD 79.8bnUSD 81.5bnUSD 83.2bnUSD 84.9bn+2.1%
    EBITUSD 4.4bnUSD 4.5bnUSD 4.5bnUSD 4.6bnUSD 4.7bn+2.1%
    NOPATUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.6bnUSD 3.7bn+2.1%
    Add depreciation & amortisationUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bn+2.1%
    Less capital expenditureUSD -2.2bnUSD -2.2bnUSD -2.3bnUSD -2.3bnUSD -2.4bn+2.1%
    Less increase in working capitalUSD -101.6mUSD -103.8mUSD -106.0mUSD -108.2mUSD -110.5m+2.1%
    Free cashflow to firmUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.4bnUSD 3.5bn+2.1%
    Discount factor0.96680.90370.84470.78960.7381-
    Present valueUSD 3.1bnUSD 3.0bnUSD 2.8bnUSD 2.7bnUSD 2.6bn-4.6%
    Present Value Of The ForecastUSD 14.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.806Reported 0.711, pulled toward 1.0 (Blume)
    Cost of equity7.74%Risk-free + beta x equity risk premium
    Cost of debt4.67%Interest expense / average total debt
    Market capitalisationUSD 72.5bn81.5% of capital
    Total debtUSD 16.4bn18.5% of capital, book value as a proxy
    Tax rate21.6%Effective, capped at statutory
    WACC6.98%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 55.13

    78% of EV

    Forecast FCFF, final year
    USD 3.5bn
    Capex at depreciation, working capital in reinvestment
    USD 3.7bn
    Less reinvestment at g/ROIC (19.5% of NOPAT)
    USD -724.4m
    Capitalised
    USD 3.0bn
    ROIC (reported)
    12.8%
    Terminal value, undiscounted
    USD 68.4bn
    Terminal value, discounted
    USD 50.5bn
    Enterprise value
    USD 64.7bn
    Less net debt
    USD 13.3bn
    Equity value
    USD 51.4bn

    Exit at 12.4x EBITDA

    Value per shareUSD 69.67

    82% of EV

    Terminal value, undiscounted
    USD 86.8bn
    Terminal value, discounted
    USD 64.0bn
    Enterprise value
    USD 78.3bn
    Less net debt
    USD 13.3bn
    Equity value
    USD 65.0bn

    Spread between methods: 23%.

    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%
    4.98%84.1094.12108.12129.12164.20
    5.98%62.6967.6674.0382.5094.33
    6.98%49.0751.8155.1359.2664.54
    7.98%39.6641.2543.1145.3248.00
    8.98%32.7533.7034.7836.0237.47

    Outlined: this model. Green text: above today's price of 56.52. 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 year2.1%2.6%+0.5pp
    EBIT margin5.6%5.7%+0.1pp
    Discount rate7.0%6.9%-0.1pp
    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.