DCF Studio

    CHD · NYQ · Consumer Defensive

    Church & Dwight Co., Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 66.64

    Market price

    USD 94.75

    Implied upside

    -29.7%

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

    Value Per Share

    Perpetuity growth
    USD 66.64-29.7%
    Exit multiple
    USD 103.53+9.3%
    Market price
    USD 94.75

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 6.5bnUSD 6.8bnUSD 7.2bnUSD 7.5bnUSD 7.9bn+4.9%
    EBITUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+4.9%
    NOPATUSD 940.9mUSD 986.9mUSD 1.0bnUSD 1.1bnUSD 1.1bn+4.9%
    Add depreciation & amortisationUSD 257.3mUSD 269.8mUSD 283.0mUSD 296.9mUSD 311.4m+4.9%
    Less capital expenditureUSD -196.0mUSD -205.6mUSD -215.7mUSD -226.2mUSD -237.3m+4.9%
    Less increase in working capitalUSD -5.7mUSD -6.0mUSD -6.3mUSD -6.6mUSD -6.9m+4.9%
    Free cashflow to firmUSD 996.4mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+4.9%
    Discount factor0.96160.88920.82230.76040.7031-
    Present valueUSD 958.2mUSD 929.3mUSD 901.4mUSD 874.3mUSD 848.0m-3.0%
    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
    Beta0.646Reported 0.472, pulled toward 1.0 (Blume)
    Cost of equity8.55%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 22.5bn91.1% of capital
    Total debtUSD 2.2bn8.9% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.14%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 66.64

    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 (18.5% of NOPAT)
    USD -240.7m
    Capitalised
    USD 1.1bn
    ROIC (reported)
    13.5%
    Terminal value, undiscounted
    USD 19.3bn
    Terminal value, discounted
    USD 13.6bn
    Enterprise value
    USD 18.1bn
    Less net debt
    USD 1.8bn
    Equity value
    USD 16.3bn

    Exit at 18.3x EBITDA

    Value per shareUSD 103.53

    83% of EV

    Terminal value, undiscounted
    USD 32.1bn
    Terminal value, discounted
    USD 22.6bn
    Enterprise value
    USD 27.1bn
    Less net debt
    USD 1.8bn
    Equity value
    USD 25.3bn

    Spread between methods: 43%.

    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%
    6.14%91.2697.56105.55116.03130.43
    7.14%74.0777.6381.9187.2093.90
    8.14%62.0664.1766.6469.5673.09
    9.14%53.1854.4855.9657.6559.62
    10.14%46.3647.1748.0649.0650.19

    Outlined: this model. Green text: above today's price of 94.75. 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 year4.9%12.7%+7.8pp
    EBIT margin18.3%26.1%+7.8pp
    Discount rate8.1%6.5%-1.6pp
    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.