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    DXS.AX · ASX · Real Estate

    DEXUS

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    Implied value per share

    AUD -2.39

    Market price

    AUD 5.55

    Implied upside

    -143.1%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Current EV/EBITDA of 43.2x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    AUD -2.39-143.1%
    Exit multiple
    AUD -1.05-118.9%
    Market price
    AUD 5.55

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m87m175mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 612.2mAUD 566.0mAUD 523.3mAUD 483.8mAUD 447.4m-7.5%
    EBITAUD 251.1mAUD 232.2mAUD 214.7mAUD 198.5mAUD 183.5m-7.5%
    NOPATAUD 175.8mAUD 162.5mAUD 150.3mAUD 138.9mAUD 128.5m-7.5%
    Add depreciation & amortisationAUD 11.9mAUD 11.0mAUD 10.2mAUD 9.4mAUD 8.7m-7.5%
    Less capital expenditureAUD -11.8mAUD -10.9mAUD -10.1mAUD -9.3mAUD -8.6m-7.5%
    Less increase in working capitalAUD -1.3mAUD -1.2mAUD -1.1mAUD -1.0mAUD -943.6k-7.5%
    Free cashflow to firmAUD 174.6mAUD 161.4mAUD 149.2mAUD 138.0mAUD 127.6m-7.5%
    Discount factor0.96480.89800.83580.77800.7241-
    Present valueAUD 168.4mAUD 144.9mAUD 124.7mAUD 107.3mAUD 92.4m-13.9%
    Present Value Of The ForecastAUD 637.8m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.829Reported 0.745, pulled toward 1.0 (Blume)
    Cost of equity10.32%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationAUD 6.0bn56.1% of capital
    Total debtAUD 4.7bn43.9% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC7.44%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 shareAUD -2.39

    67% of EV

    Forecast FCFF, final year
    AUD 127.6m
    Capex at depreciation, working capital in reinvestment
    AUD 128.5m
    Less reinvestment at g/ROIC (33.6% of NOPAT)
    AUD -43.2m
    Capitalised
    AUD 85.3m
    ROIC (WACC floor)
    7.4%
    Terminal value, undiscounted
    AUD 1.8bn
    Terminal value, discounted
    AUD 1.3bn
    Enterprise value
    AUD 1.9bn
    Less net debt
    AUD 4.6bn
    Equity value
    AUD -2.7bn

    Exit at 20.0x EBITDA

    Value per shareAUD -1.05

    81% of EV

    Terminal value, undiscounted
    AUD 3.8bn
    Terminal value, discounted
    AUD 2.8bn
    Enterprise value
    AUD 3.4bn
    Less net debt
    AUD 4.6bn
    Equity value
    AUD -1.2bn

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.44%-1.83-1.82-1.81-1.80-1.79
    6.44%-2.16-2.15-2.15-2.14-2.13
    7.44%-2.40-2.40-2.39-2.39-2.38
    8.44%-2.59-2.59-2.58-2.58-2.57
    9.44%-2.74-2.73-2.73-2.73-2.72

    Outlined: this model. Green text: above today's price of 5.55. 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-7.5%35.5%+43.0pp
    Discount rate7.4%2.6%-4.8pp
    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.