DCF Studio

    BXP · NYQ · Real Estate

    BXP, Inc.

    Also onConsensus Drift

    Implied value per share

    USD 14.17

    Market price

    USD 63.17

    Implied upside

    -77.6%

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

    AdjustedReported capital expenditure averages just 0.00% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 25.48% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 14.17-77.6%
    Exit multiple
    USD 84.01+33.0%
    Market price
    USD 63.17

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 3.6bnUSD 3.8bnUSD 3.9bnUSD 4.1bnUSD 4.2bn+3.9%
    EBITUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+3.9%
    NOPATUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+3.9%
    Add depreciation & amortisationUSD 921.7mUSD 957.2mUSD 994.1mUSD 1.0bnUSD 1.1bn+3.9%
    Less capital expenditureUSD -921.7mUSD -957.2mUSD -994.1mUSD -1.0bnUSD -1.1bn+3.9%
    Less increase in working capitalUSD -134.3mUSD -139.5mUSD -144.9mUSD -150.4mUSD -156.2m+3.9%
    Free cashflow to firmUSD 995.8mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+3.9%
    Discount factor0.96570.90060.83990.78320.7304-
    Present valueUSD 961.7mUSD 931.4mUSD 902.1mUSD 873.7mUSD 846.2m-3.1%
    Present Value Of The ForecastUSD 4.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.022Reported 1.033, pulled toward 1.0 (Blume)
    Cost of equity10.62%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 11.4bn39.7% of capital
    Total debtUSD 17.4bn60.3% of capital, book value as a proxy
    Tax rate0.0%Effective, capped at statutory
    WACC7.23%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 14.17

    75% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.3bn
    Less reinvestment at g/ROIC (34.6% of NOPAT)
    USD -454.7m
    Capitalised
    USD 860.1m
    ROIC (WACC floor)
    7.2%
    Terminal value, undiscounted
    USD 18.6bn
    Terminal value, discounted
    USD 13.6bn
    Enterprise value
    USD 18.1bn
    Less net debt
    USD 15.9bn
    Equity value
    USD 2.3bn

    Exit at 14.2x EBITDA

    Value per shareUSD 84.01

    85% of EV

    Terminal value, undiscounted
    USD 33.8bn
    Terminal value, discounted
    USD 24.7bn
    Enterprise value
    USD 29.2bn
    Less net debt
    USD 15.9bn
    Equity value
    USD 13.3bn

    Spread between methods: 142%.

    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%
    5.23%57.5158.1458.7759.4060.02
    6.23%31.8632.3632.8733.3733.88
    7.23%13.3313.7514.1714.5915.00
    8.23%-0.67-0.310.040.390.74
    9.23%-11.61-11.31-11.00-10.70-10.40

    Outlined: this model. Green text: above today's price of 63.17. 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 year3.9%14.1%+10.2pp
    EBIT margin31.2%44.2%+13.0pp
    Discount rate7.2%5.1%-2.1pp
    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.