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    DD · NYQ · Basic Materials

    DuPont de Nemours, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 0.38

    Market price

    USD 129.01

    Implied upside

    -99.7%

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

    Wrong toolThis model values the shares at 0.3% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedCapital expenditure runs at 12.7% of revenue against depreciation of 9.1%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 0.38-99.7%
    Exit multiple
    USD 20.70-84.0%
    Market price
    USD 129.01

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m160m320mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 5.5bnUSD 4.5bnUSD 3.6bnUSD 2.9bnUSD 2.3bn-19.3%
    EBITUSD 713.8mUSD 576.2mUSD 465.2mUSD 375.6mUSD 303.2m-19.3%
    NOPATUSD 563.9mUSD 455.2mUSD 367.5mUSD 296.7mUSD 239.5m-19.3%
    Add depreciation & amortisationUSD 503.0mUSD 406.1mUSD 327.8mUSD 264.6mUSD 213.6m-19.3%
    Less capital expenditureUSD -704.2mUSD -568.5mUSD -459.0mUSD -370.5mUSD -299.1m-19.3%
    Less increase in working capitalUSD -42.7mUSD -34.4mUSD -27.8mUSD -22.4mUSD -18.1m-19.3%
    Free cashflow to firmUSD 319.9mUSD 258.3mUSD 208.5mUSD 168.3mUSD 135.9m-19.3%
    Discount factor0.95400.86830.79020.71920.6546-
    Present valueUSD 305.2mUSD 224.3mUSD 164.8mUSD 121.1mUSD 89.0m-26.5%
    Present Value Of The ForecastUSD 904.3m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.057Reported 1.085, pulled toward 1.0 (Blume)
    Cost of equity10.81%Risk-free + beta x equity risk premium
    Cost of debt6.04%Interest expense / average total debt
    Market capitalisationUSD 17.4bn84.5% of capital
    Total debtUSD 3.2bn15.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.88%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 0.38

    64% of EV

    Forecast FCFF, final year
    USD 135.9m
    Capex at depreciation, working capital in reinvestment
    USD 239.5m
    Less reinvestment at g/ROIC (25.3% of NOPAT)
    USD -60.6m
    Capitalised
    USD 178.9m
    ROIC (WACC floor)
    9.9%
    Terminal value, undiscounted
    USD 2.5bn
    Terminal value, discounted
    USD 1.6bn
    Enterprise value
    USD 2.5bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 52.5m

    Exit at 13.2x EBITDA

    Value per shareUSD 20.70

    83% of EV

    Terminal value, undiscounted
    USD 6.8bn
    Terminal value, discounted
    USD 4.5bn
    Enterprise value
    USD 5.4bn
    Less net debt
    USD 2.5bn
    Equity value
    USD 2.9bn

    Spread between methods: 193%.

    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%
    7.88%4.674.754.824.904.98
    8.88%2.212.282.352.412.48
    9.88%0.260.320.380.430.49
    10.88%-1.33-1.28-1.23-1.18-1.13
    11.88%-2.64-2.60-2.56-2.51-2.47

    Outlined: this model. Green text: above today's price of 129.01. 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-19.3%28.0%+47.2pp
    EBIT margin12.9%84.9%+72.0pp
    Discount rate9.9%2.7%-7.2pp
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.