DCF Studio

    DOC · NYQ · Real Estate

    Healthpeak Properties, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 2.35

    Market price

    USD 20.33

    Implied upside

    -88.4%

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

    AdjustedReported capital expenditure averages just 0.00% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 37.02% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 2.35-88.4%
    Exit multiple
    USD 31.37+54.3%
    Market price
    USD 20.33

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 3.1bnUSD 3.5bnUSD 3.9bnUSD 4.3bnUSD 4.8bn+11.0%
    EBITUSD 579.2mUSD 643.2mUSD 714.3mUSD 793.2mUSD 880.8m+11.0%
    NOPATUSD 565.2mUSD 627.6mUSD 696.9mUSD 773.9mUSD 859.4m+11.0%
    Add depreciation & amortisationUSD 1.1bnUSD 1.2bnUSD 1.4bnUSD 1.5bnUSD 1.7bn+11.0%
    Less capital expenditureUSD -1.2bnUSD -1.3bnUSD -1.4bnUSD -1.6bnUSD -1.8bn+11.0%
    Less increase in working capitalUSD 215.8mUSD 239.7mUSD 266.2mUSD 295.6mUSD 328.2m-11.0%
    Free cashflow to firmUSD 732.7mUSD 813.6mUSD 903.5mUSD 1.0bnUSD 1.1bn+11.0%
    Discount factor0.96160.88910.82210.76010.7028-
    Present valueUSD 704.5mUSD 723.4mUSD 742.8mUSD 762.6mUSD 783.1m+2.7%
    Present Value Of The ForecastUSD 3.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.993Reported 0.989, pulled toward 1.0 (Blume)
    Cost of equity10.46%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 14.4bn58.7% of capital
    Total debtUSD 10.1bn41.3% of capital, book value as a proxy
    Tax rate2.4%Effective, capped at statutory
    WACC8.15%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 2.35

    67% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 859.4m
    Less reinvestment at g/ROIC (30.7% of NOPAT)
    USD -263.6m
    Capitalised
    USD 595.9m
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    USD 10.8bn
    Terminal value, discounted
    USD 7.6bn
    Enterprise value
    USD 11.3bn
    Less net debt
    USD 9.7bn
    Equity value
    USD 1.6bn

    Exit at 15.4x EBITDA

    Value per shareUSD 31.37

    88% of EV

    Terminal value, undiscounted
    USD 39.6bn
    Terminal value, discounted
    USD 27.8bn
    Enterprise value
    USD 31.5bn
    Less net debt
    USD 9.7bn
    Equity value
    USD 21.8bn

    Spread between methods: 172%.

    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%
    6.15%7.277.357.427.507.58
    7.15%4.414.474.534.604.66
    8.15%2.242.292.352.402.45
    9.15%0.550.590.640.680.73
    10.15%-0.82-0.78-0.74-0.70-0.66

    Outlined: this model. Green text: above today's price of 20.33. 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 year11.0%28.5%+17.4pp
    EBIT margin18.5%40.6%+22.1pp
    Discount rate8.2%3.8%-4.4pp
    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.