DCF Studio

    BIIB · NMS · Healthcare

    Biogen Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 224.88

    Market price

    USD 215.50

    Implied upside

    +4.4%

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

    Value Per Share

    Perpetuity growth
    USD 224.88+4.4%
    Exit multiple
    USD 197.07-8.6%
    Market price
    USD 215.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 9.8bnUSD 9.7bnUSD 9.6bnUSD 9.5bnUSD 9.4bn-0.9%
    EBITUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bn-0.9%
    NOPATUSD 2.0bnUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.9bn-0.9%
    Add depreciation & amortisationUSD 611.6mUSD 605.9mUSD 600.2mUSD 594.6mUSD 589.1m-0.9%
    Less capital expenditureUSD -285.5mUSD -282.8mUSD -280.2mUSD -277.6mUSD -275.0m-0.9%
    Less increase in working capitalUSD -89.9mUSD -89.1mUSD -88.2mUSD -87.4mUSD -86.6m-0.9%
    Free cashflow to firmUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.1bn-0.9%
    Discount factor0.96720.90490.84650.79200.7409-
    Present valueUSD 2.1bnUSD 2.0bnUSD 1.8bnUSD 1.7bnUSD 1.6bn-7.3%
    Present Value Of The ForecastUSD 9.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.445Reported 0.171, pulled toward 1.0 (Blume)
    Cost of equity7.44%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 31.8bn82.9% of capital
    Total debtUSD 6.6bn17.1% of capital, book value as a proxy
    Tax rate15.7%Effective, capped at statutory
    WACC6.89%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 224.88

    74% of EV

    Forecast FCFF, final year
    USD 2.1bn
    Capex at depreciation, working capital in reinvestment
    USD 2.2bn
    Less reinvestment at g/ROIC (29.7% of NOPAT)
    USD -648.7m
    Capitalised
    USD 1.5bn
    ROIC (reported)
    8.4%
    Terminal value, undiscounted
    USD 35.9bn
    Terminal value, discounted
    USD 26.6bn
    Enterprise value
    USD 35.8bn
    Less net debt
    USD 2.8bn
    Equity value
    USD 33.1bn

    Exit at 10.7x EBITDA

    Value per shareUSD 197.07

    71% of EV

    Terminal value, undiscounted
    USD 30.4bn
    Terminal value, discounted
    USD 22.5bn
    Enterprise value
    USD 31.8bn
    Less net debt
    USD 2.8bn
    Equity value
    USD 29.0bn

    Spread between methods: 13%.

    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%
    4.89%341.93369.53408.38467.40568.36
    5.89%263.78275.16289.70309.03336.15
    6.89%214.53219.25224.88231.80240.56
    7.89%180.62182.21183.96185.95188.25
    8.89%157.13157.70158.27158.84159.41

    Outlined: this model. Green text: above today's price of 215.50. 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 year-0.9%-1.6%-0.7pp
    EBIT margin24.0%22.9%-1.1pp
    Discount rate6.9%7.1%+0.2pp
    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.