CNP · NYQ · Utilities
CenterPoint Energy, Inc.
Also onShortfallConsensus DriftCrosscheck
Implied value per share
USD -1.94
Market price
USD 42.65
Implied upside
-104.5%
10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (USD). Outflows negative.
| Line | FY26 | FY27 | FY28 | FY29 | FY30 | FY31 | FY32 | FY33 | FY34 | FY35 | CAGR |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | USD 10.0bn | USD 10.5bn | USD 10.9bn | USD 11.4bn | USD 11.9bn | USD 12.3bn | USD 12.7bn | USD 13.1bn | USD 13.5bn | USD 13.8bn | +3.7% |
| EBIT | USD 2.1bn | USD 2.2bn | USD 2.3bn | USD 2.4bn | USD 2.4bn | USD 2.5bn | USD 2.6bn | USD 2.7bn | USD 2.8bn | USD 2.9bn | +3.7% |
| NOPAT | USD 1.7bn | USD 1.8bn | USD 1.9bn | USD 2.0bn | USD 2.1bn | USD 2.1bn | USD 2.2bn | USD 2.3bn | USD 2.3bn | USD 2.4bn | +3.7% |
| Add depreciation & amortisation | USD 1.6bn | USD 1.6bn | USD 1.7bn | USD 1.8bn | USD 1.9bn | USD 1.9bn | USD 2.0bn | USD 2.1bn | USD 2.1bn | USD 2.2bn | +3.7% |
| Less capital expenditure | USD -5.0bn | USD -4.9bn | USD -4.8bn | USD -4.6bn | USD -4.4bn | USD -4.1bn | USD -3.9bn | USD -3.5bn | USD -3.2bn | USD -2.8bn | -6.3% |
| Capex, % of revenue | 50.6% | 47.2% | 43.8% | 40.5% | 37.1% | 33.8% | 30.4% | 27.0% | 23.7% | 20.3% | - |
| Less increase in working capital | USD -21.6m | USD -16.9m | USD -16.6m | USD -16.3m | USD -15.8m | USD -15.2m | USD -14.5m | USD -13.7m | USD -12.8m | USD -11.7m | -6.5% |
| Free cashflow to firm | USD -1.8bn | USD -1.5bn | USD -1.2bn | USD -856.9m | USD -491.3m | USD -95.0m | USD 330.1m | USD 781.8m | USD 1.3bn | USD 1.8bn | - |
| Discount factor | 0.9690 | 0.9099 | 0.8544 | 0.8023 | 0.7534 | 0.7074 | 0.6643 | 0.6238 | 0.5857 | 0.5500 | - |
| Present value | USD -1.7bn | USD -1.4bn | USD -1.0bn | USD -687.5m | USD -370.1m | USD -67.2m | USD 219.3m | USD 487.7m | USD 736.6m | USD 964.9m | - |
| Present Value Of The Forecast | USD -2.8bn | ||||||||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 4.89% | US 10-year Treasury (^TNX), 2026-11-02 |
| Equity risk premium | 4.23% | Damodaran, January 2026 |
| Beta | 0.612 | Reported 0.421, pulled toward 1.0 (Blume) |
| Cost of equity | 7.48% | Risk-free + beta x equity risk premium |
| Cost of debt | 6.27% | Risk-free + 138bp, the spread for a BB+ rating at 2.3x interest cover. Book interest / average debt was lower, at 4.1%. |
| Market capitalisation | USD 28.3bn | 55.2% of capital |
| Total debt | USD 23.0bn | 44.8% of capital, book value as a proxy |
| Tax rate | 15.9% | Effective, capped at statutory |
| WACC | 6.50% | 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%
113% of EV
- Forecast FCFF, final year
- USD 1.8bn
- Capex at depreciation, working capital in reinvestment
- USD 2.8bn
- Less reinvestment at g/ROIC (38.5% of NOPAT)
- USD -1.1bn
- Capitalised
- USD 1.7bn
- ROIC (WACC floor)
- 6.5%
- Terminal value, undiscounted
- USD 43.6bn
- Terminal value, discounted
- USD 24.0bn
- Enterprise value
- USD 21.2bn
- Less net debt
- USD 22.4bn
- Equity value
- USD -1.3bn
Exit at 13.9x EBITDA
108% of EV
- Terminal value, undiscounted
- USD 69.9bn
- Terminal value, discounted
- USD 38.5bn
- Enterprise value
- USD 35.7bn
- Less net debt
- USD 22.4bn
- Equity value
- USD 13.2bn
Sensitivity
Value per share (USD) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 4.50% | 30.21 | 31.79 | 34.71 | 40.33 | 52.71 |
| 5.50% | 9.97 | 8.97 | 7.97 | 6.98 | 5.98 |
| 6.49% | -0.34 | -1.14 | -1.94 | -2.74 | -3.53 |
| 7.50% | -7.72 | -8.38 | -9.03 | -9.68 | -10.34 |
| 8.49% | -13.22 | -13.77 | -14.31 | -14.86 | -15.40 |
Outlined: this model. Green text: above today's price of 42.65. 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.
| Input | Actual | Model | Implied | Gap |
|---|---|---|---|---|
| Revenue growth, a year | 0.1% | 4.0% | 12.5% | |
| EBIT margin | 23.0% | 20.7% | 38.8% | |
| Discount rate | - | 6.5% | 4.3% |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.