DCF Studio

    CPT · NYQ · Real Estate

    Camden Property Trust

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 13.30

    Market price

    USD 99.12

    Implied upside

    -86.6%

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

    Value Per Share

    Perpetuity growth
    USD 13.30-86.6%
    Exit multiple
    USD 103.24+4.2%
    Market price
    USD 99.12

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m307m615mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bn+3.4%
    EBITUSD 313.2mUSD 323.9mUSD 334.9mUSD 346.4mUSD 358.2m+3.4%
    NOPATUSD 310.2mUSD 320.8mUSD 331.8mUSD 343.1mUSD 354.8m+3.4%
    Add depreciation & amortisationUSD 628.0mUSD 649.4mUSD 671.6mUSD 694.5mUSD 718.3m+3.4%
    Less capital expenditureUSD -454.5mUSD -470.1mUSD -486.1mUSD -502.7mUSD -519.9m+3.4%
    Less increase in working capitalUSD 53.7mUSD 55.6mUSD 57.5mUSD 59.4mUSD 61.5m-3.4%
    Free cashflow to firmUSD 537.4mUSD 555.7mUSD 574.7mUSD 594.3mUSD 614.6m+3.4%
    Discount factor0.96010.88490.81570.75180.6930-
    Present valueUSD 515.9mUSD 491.8mUSD 468.8mUSD 446.9mUSD 425.9m-4.7%
    Present Value Of The ForecastUSD 2.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.854Reported 0.782, pulled toward 1.0 (Blume)
    Cost of equity9.69%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 11.5bn74.6% of capital
    Total debtUSD 3.9bn25.4% of capital, book value as a proxy
    Tax rate0.9%Effective, capped at statutory
    WACC8.49%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 13.30

    56% of EV

    Forecast FCFF, final year
    USD 614.6m
    Capex at depreciation, working capital in reinvestment
    USD 354.8m
    Less reinvestment at g/ROIC (29.4% of NOPAT)
    USD -104.5m
    Capitalised
    USD 250.3m
    ROIC (WACC floor)
    8.5%
    Terminal value, undiscounted
    USD 4.3bn
    Terminal value, discounted
    USD 3.0bn
    Enterprise value
    USD 5.3bn
    Less net debt
    USD 3.9bn
    Equity value
    USD 1.4bn

    Exit at 17.1x EBITDA

    Value per shareUSD 103.24

    84% of EV

    Terminal value, undiscounted
    USD 18.4bn
    Terminal value, discounted
    USD 12.7bn
    Enterprise value
    USD 15.1bn
    Less net debt
    USD 3.9bn
    Equity value
    USD 11.2bn

    Spread between methods: 154%.

    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%
    6.49%25.4825.6725.8626.0526.24
    7.49%18.4518.6018.7618.9219.08
    8.49%13.0313.1613.3013.4313.57
    9.49%8.728.848.959.079.18
    10.49%5.215.315.415.515.61

    Outlined: this model. Green text: above today's price of 99.12. 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 year3.4%26.1%+22.7pp
    EBIT margin19.2%60.7%+41.4pp
    Discount rate8.5%3.3%-5.2pp
    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.