DCF Studio

    BEZ.L · LSE · Financial Services

    Beazley plc

    Also onConsensus Drift

    Implied value per share

    GBp 48029.50

    Market price

    GBp 1305.00

    Implied upside

    +3580.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.7466

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    Wrong toolThis model values the shares at 36.8x the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReports in USD, trades in GBp. Modelled in USD, converted at the end.
    AdjustedConsensus rests on as few as 2 analyst estimate(s).
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 48029.50+3580.4%
    Exit multiple
    GBp 23753.39+1720.2%
    Market price
    GBp 1305.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn14bn28bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 1.6bnUSD 2.4bnUSD 3.6bnUSD 5.4bnUSD 8.0bn+50.0%
    EBITUSD 6.2bnUSD 9.4bnUSD 14.1bnUSD 21.1bnUSD 31.6bn+50.0%
    NOPATUSD 5.0bnUSD 7.6bnUSD 11.4bnUSD 17.0bnUSD 25.5bn+50.0%
    Add depreciation & amortisationUSD 258.8mUSD 388.3mUSD 582.4mUSD 873.6mUSD 1.3bn+50.0%
    Less capital expenditureUSD -265.7mUSD -398.6mUSD -597.9mUSD -896.8mUSD -1.3bn+50.0%
    Less increase in working capitalUSD 510.5mUSD 765.7mUSD 1.1bnUSD 1.7bnUSD 2.6bn-50.0%
    Free cashflow to firmUSD 5.5bnUSD 8.3bnUSD 12.5bnUSD 18.7bnUSD 28.1bn+50.0%
    Discount factor0.96540.89970.83850.78140.7283-
    Present valueUSD 5.4bnUSD 7.5bnUSD 10.5bnUSD 14.6bnUSD 20.5bn+39.8%
    Present Value Of The ForecastUSD 58.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.538Reported 0.311, pulled toward 1.0 (Blume)
    Cost of equity7.46%Risk-free + beta x equity risk premium
    Cost of debt6.58%Interest expense / average total debt
    Market capitalisationUSD 7.8bn92.5% of capital
    Total debtUSD 626.7m7.5% of capital, book value as a proxy
    Tax rate19.2%Effective, capped at statutory
    WACC7.30%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 643.28

    86% of EV

    Forecast FCFF, final year
    USD 28.1bn
    Capex at depreciation, working capital in reinvestment
    USD 25.5bn
    Less reinvestment at g/ROIC (12.7% of NOPAT)
    USD -3.2bn
    Capitalised
    USD 22.3bn
    ROIC (reported)
    19.7%
    Terminal value, undiscounted
    USD 476.1bn
    Terminal value, discounted
    USD 346.8bn
    Enterprise value
    USD 405.2bn
    Less net debt
    USD -741.8m
    Equity value
    USD 405.9bn

    Exit at 5.9x EBITDA

    Value per shareUSD 318.14

    71% of EV

    Terminal value, undiscounted
    USD 194.4bn
    Terminal value, discounted
    USD 141.6bn
    Enterprise value
    USD 200.0bn
    Less net debt
    USD -741.8m
    Equity value
    USD 200.7bn

    Spread between methods: 68%.

    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%
    5.30%891.00990.211124.541316.911615.62
    6.30%697.13751.73820.50909.861030.84
    7.30%570.32603.43643.29692.23753.86
    8.30%480.98502.36527.31556.83592.35
    9.30%414.69429.11445.56464.51486.60

    Outlined: this model. Green text: above today's price of 17.48. 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 year50.0%-33.5%-83.5pp
    EBIT margin393.7%4.9%-388.8pp
    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.