DCF Studio

    BG · NYQ · Consumer Defensive

    Bunge Global SA

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 81.86

    Market price

    USD 115.58

    Implied upside

    -29.2%

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

    AdjustedCapital expenditure runs at 1.9% of revenue against depreciation of 0.8%. 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.

    Value Per Share

    Perpetuity growth
    USD 81.86-29.2%
    Exit multiple
    USD 170.09+47.2%
    Market price
    USD 115.58

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 71.4bnUSD 72.5bnUSD 73.6bnUSD 74.7bnUSD 75.8bn+1.5%
    EBITUSD 2.4bnUSD 2.5bnUSD 2.5bnUSD 2.5bnUSD 2.6bn+1.5%
    NOPATUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.0bn+1.5%
    Add depreciation & amortisationUSD 579.2mUSD 588.0mUSD 596.9mUSD 605.9mUSD 615.0m+1.5%
    Less capital expenditureUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.5bn+1.5%
    Less increase in working capitalUSD -31.0mUSD -31.5mUSD -32.0mUSD -32.4mUSD -32.9m+1.5%
    Free cashflow to firmUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bn+1.5%
    Discount factor0.96590.90110.84060.78420.7316-
    Present valueUSD 1.0bnUSD 988.1mUSD 935.7mUSD 886.2mUSD 839.2m-5.3%
    Present Value Of The ForecastUSD 4.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.772Reported 0.660, pulled toward 1.0 (Blume)
    Cost of equity9.25%Risk-free + beta x equity risk premium
    Cost of debt5.47%Interest expense / average total debt
    Market capitalisationUSD 22.2bn58.3% of capital
    Total debtUSD 15.9bn41.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.19%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 81.86

    84% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 2.0bn
    Less reinvestment at g/ROIC (23.7% of NOPAT)
    USD -482.5m
    Capitalised
    USD 1.6bn
    ROIC (reported)
    10.5%
    Terminal value, undiscounted
    USD 33.9bn
    Terminal value, discounted
    USD 24.8bn
    Enterprise value
    USD 29.5bn
    Less net debt
    USD 13.7bn
    Equity value
    USD 15.8bn

    Exit at 17.9x EBITDA

    Value per shareUSD 170.09

    90% of EV

    Terminal value, undiscounted
    USD 57.2bn
    Terminal value, discounted
    USD 41.9bn
    Enterprise value
    USD 46.5bn
    Less net debt
    USD 13.7bn
    Equity value
    USD 32.9bn

    Spread between methods: 70%.

    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%
    5.19%152.21171.55197.93236.16296.74
    6.19%103.10112.41124.14139.42160.23
    7.19%71.3376.1281.8688.8897.70
    8.19%49.1251.6254.4957.8461.84
    9.19%32.7533.9835.3436.8738.60

    Outlined: this model. Green text: above today's price of 115.58. 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 year1.5%6.2%+4.7pp
    EBIT margin3.4%4.1%+0.7pp
    Discount rate7.2%6.4%-0.8pp
    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.