DCF Studio

    CCO.TO · TOR · Energy

    Cameco Corporation

    Also onConsensus Drift

    Implied value per share

    CAD 21.63

    Market price

    CAD 128.10

    Implied upside

    -83.1%

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

    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Current EV/EBITDA of 60.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    CAD 21.63-83.1%
    Exit multiple
    CAD 69.13-46.0%
    Market price
    CAD 128.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CAD). Outflows negative.

    0m466m932mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCAD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCAD 4.3bnCAD 5.3bnCAD 6.5bnCAD 8.0bnCAD 9.8bn+23.1%
    EBITCAD 492.7mCAD 606.4mCAD 746.2mCAD 918.4mCAD 1.1bn+23.1%
    NOPATCAD 364.9mCAD 449.1mCAD 552.7mCAD 680.2mCAD 837.1m+23.1%
    Add depreciation & amortisationCAD 379.0mCAD 466.4mCAD 574.0mCAD 706.5mCAD 869.4m+23.1%
    Less capital expenditureCAD -320.6mCAD -394.6mCAD -485.6mCAD -597.7mCAD -735.5m+23.1%
    Less increase in working capitalCAD -17.0mCAD -20.9mCAD -25.7mCAD -31.6mCAD -38.9m+23.1%
    Free cashflow to firmCAD 406.4mCAD 500.1mCAD 615.5mCAD 757.4mCAD 932.2m+23.1%
    Discount factor0.95870.88120.80990.74440.6842-
    Present valueCAD 389.6mCAD 440.7mCAD 498.5mCAD 563.9mCAD 637.8m+13.1%
    Present Value Of The ForecastCAD 2.5bn

    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
    Beta1.008Reported 1.012, pulled toward 1.0 (Blume)
    Cost of equity8.84%Risk-free + beta x equity risk premium
    Cost of debt8.41%Interest expense / average total debt
    Market capitalisationCAD 55.8bn98.2% of capital
    Total debtCAD 996.3m1.8% of capital, book value as a proxy
    Tax rate25.9%Effective, capped at statutory
    WACC8.80%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 shareCAD 21.63

    73% of EV

    Forecast FCFF, final year
    CAD 932.2m
    Capex at depreciation, working capital in reinvestment
    CAD 837.1m
    Less reinvestment at g/ROIC (28.4% of NOPAT)
    CAD -237.9m
    Capitalised
    CAD 599.3m
    ROIC (WACC floor)
    8.8%
    Terminal value, undiscounted
    CAD 9.8bn
    Terminal value, discounted
    CAD 6.7bn
    Enterprise value
    CAD 9.2bn
    Less net debt
    CAD -218.1m
    Equity value
    CAD 9.4bn

    Exit at 20.0x EBITDA

    Value per shareCAD 69.13

    92% of EV

    Terminal value, undiscounted
    CAD 40.0bn
    Terminal value, discounted
    CAD 27.4bn
    Enterprise value
    CAD 29.9bn
    Less net debt
    CAD -218.1m
    Equity value
    CAD 30.1bn

    Spread between methods: 105%.

    Sensitivity

    Value per share (CAD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.80%27.9628.0628.1728.2728.38
    7.80%24.3024.3924.4824.5724.65
    8.80%21.4821.5621.6321.7021.78
    9.80%19.2419.3019.3719.4319.50
    10.80%17.4217.4717.5317.5817.64

    Outlined: this model. Green text: above today's price of 128.10. 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 year23.1%81.1%+58.0pp
    EBIT margin11.5%71.1%+59.6pp
    Discount rate8.8%3.0%-5.8pp
    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.