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    CMS · NYQ · Utilities

    CMS Energy Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD -5.81

    Market price

    USD 70.76

    Implied upside

    -108.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 41.0% of revenue against depreciation of 15.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD -5.81-108.2%
    Exit multiple
    USD 35.43-49.9%
    Market price
    USD 70.76

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -1bn0bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 8.9bnUSD 9.4bnUSD 9.8bnUSD 10.2bnUSD 10.6bnUSD 11.0bnUSD 11.4bnUSD 11.7bnUSD 12.1bnUSD 12.4bn+3.7%
    EBITUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.1bnUSD 2.2bn+3.7%
    NOPATUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bn+3.7%
    Add depreciation & amortisationUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bn+3.7%
    Less capital expenditureUSD -3.7bnUSD -3.6bnUSD -3.6bnUSD -3.5bnUSD -3.4bnUSD -3.2bnUSD -3.1bnUSD -2.9bnUSD -2.7bnUSD -2.5bn-4.3%
    Capex, % of revenue41.0%38.6%36.3%33.9%31.6%29.3%26.9%24.6%22.2%19.9%-
    Less increase in working capitalUSD -45.3mUSD -53.0mUSD -52.2mUSD -51.0mUSD -49.5mUSD -47.5mUSD -45.3mUSD -42.6mUSD -39.7mUSD -36.4m-2.4%
    Free cashflow to firmUSD -1.0bnUSD -847.0mUSD -653.9mUSD -439.8mUSD -205.3mUSD 48.7mUSD 320.9mUSD 609.8mUSD 913.7mUSD 1.2bn-
    Discount factor0.96920.91030.85500.80300.75430.70840.66540.62500.58700.5514-
    Present valueUSD -979.5mUSD -771.0mUSD -559.1mUSD -353.1mUSD -154.8mUSD 34.5mUSD 213.5mUSD 381.1mUSD 536.4mUSD 678.5m-
    Present Value Of The ForecastUSD -973.5m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.529Reported 0.297, pulled toward 1.0 (Blume)
    Cost of equity7.13%Risk-free + beta x equity risk premium
    Cost of debt6.73%Risk-free + 184bp, the spread for a BB rating at 2.2x interest cover. Book interest / average debt was lower, at 4.5%.
    Market capitalisationUSD 22.2bn54.0% of capital
    Total debtUSD 18.9bn46.0% of capital, book value as a proxy
    Tax rate15.5%Effective, capped at statutory
    WACC6.47%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 -5.81

    106% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 2.0bn
    Less reinvestment at g/ROIC (38.7% of NOPAT)
    USD -779.2m
    Capitalised
    USD 1.2bn
    ROIC (WACC floor)
    6.5%
    Terminal value, undiscounted
    USD 31.9bn
    Terminal value, discounted
    USD 17.6bn
    Enterprise value
    USD 16.6bn
    Less net debt
    USD 18.4bn
    Equity value
    USD -1.7bn

    Exit at 13.4x EBITDA

    Value per shareUSD 35.43

    103% of EV

    Terminal value, undiscounted
    USD 54.5bn
    Terminal value, discounted
    USD 30.0bn
    Enterprise value
    USD 29.1bn
    Less net debt
    USD 18.4bn
    Equity value
    USD 10.7bn

    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%
    4.47%44.5146.1749.6056.6372.83
    5.47%13.4111.8110.218.617.02
    6.47%-3.26-4.53-5.81-7.08-8.36
    7.47%-15.19-16.23-17.28-18.32-19.37
    8.47%-24.08-24.96-25.83-26.70-27.57

    Outlined: this model. Green text: above today's price of 70.76. 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.

    InputActualModelImplied
    Revenue growth, a year-0.2%3.8%12.8%
    EBIT margin20.2%17.7%33.6%
    Discount rate-6.5%4.2%
    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.