DCF Studio

    CTVA · NYQ · Basic Materials

    Corteva, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 43.51

    Market price

    USD 80.53

    Implied upside

    -46.0%

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

    Value Per Share

    Perpetuity growth
    USD 43.51-46.0%
    Exit multiple
    USD 63.42-21.2%
    Market price
    USD 80.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 17.4bnUSD 17.4bnUSD 17.3bnUSD 17.3bnUSD 17.3bn-0.1%
    EBITUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bn-0.1%
    NOPATUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bn-0.1%
    Add depreciation & amortisationUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bn-0.1%
    Less capital expenditureUSD -601.8mUSD -601.2mUSD -600.5mUSD -599.9mUSD -599.3m-0.1%
    Less increase in working capitalUSD -18.0mUSD -17.9mUSD -17.9mUSD -17.9mUSD -17.9m-0.1%
    Free cashflow to firmUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bn-0.1%
    Discount factor0.95880.88150.81030.74500.6848-
    Present valueUSD 2.3bnUSD 2.1bnUSD 1.9bnUSD 1.7bnUSD 1.6bn-8.2%
    Present Value Of The ForecastUSD 9.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.717Reported 0.577, pulled toward 1.0 (Blume)
    Cost of equity8.94%Risk-free + beta x equity risk premium
    Cost of debt6.81%Interest expense / average total debt
    Market capitalisationUSD 53.7bn95.4% of capital
    Total debtUSD 2.6bn4.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.78%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 43.51

    65% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 2.3bn
    Less reinvestment at g/ROIC (28.5% of NOPAT)
    USD -645.8m
    Capitalised
    USD 1.6bn
    ROIC (WACC floor)
    8.8%
    Terminal value, undiscounted
    USD 26.5bn
    Terminal value, discounted
    USD 18.1bn
    Enterprise value
    USD 27.7bn
    Less net debt
    USD -1.9bn
    Equity value
    USD 29.6bn

    Exit at 13.5x EBITDA

    Value per shareUSD 63.42

    77% of EV

    Terminal value, undiscounted
    USD 46.3bn
    Terminal value, discounted
    USD 31.7bn
    Enterprise value
    USD 41.3bn
    Less net debt
    USD -1.9bn
    Equity value
    USD 43.2bn

    Spread between methods: 37%.

    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%
    6.78%54.6254.8054.9955.1755.35
    7.78%48.2048.3648.5148.6648.81
    8.78%43.2543.3843.5143.6443.77
    9.78%39.3039.4139.5339.6439.75
    10.78%36.0936.1936.2836.3836.48

    Outlined: this model. Green text: above today's price of 80.53. 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 year-0.1%10.8%+10.9pp
    EBIT margin12.7%27.9%+15.3pp
    Discount rate8.8%5.1%-3.7pp
    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.