DCF Studio

    EXPN.L · LSE · Industrials

    Experian plc

    Also onConsensus Drift

    Implied value per share

    GBp 2777.40

    Market price

    GBp 2727.00

    Implied upside

    +1.8%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 0.7466

    AdjustedReports in USD, trades in GBp. Modelled in USD, converted at the end.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 2777.40+1.8%
    Exit multiple
    GBp 2638.13-3.3%
    Market price
    GBp 2727.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 9.2bnUSD 9.9bnUSD 10.8bnUSD 11.7bnUSD 12.7bn+8.5%
    EBITUSD 2.1bnUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 2.9bn+8.5%
    NOPATUSD 1.6bnUSD 1.7bnUSD 1.9bnUSD 2.0bnUSD 2.2bn+8.5%
    Add depreciation & amortisationUSD 931.8mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bn+8.5%
    Less capital expenditureUSD -818.4mUSD -887.7mUSD -962.7mUSD -1.0bnUSD -1.1bn+8.5%
    Less increase in working capitalUSD -90.6mUSD -98.2mUSD -106.5mUSD -115.5mUSD -125.3m+8.5%
    Free cashflow to firmUSD 1.6bnUSD 1.8bnUSD 1.9bnUSD 2.1bnUSD 2.2bn+8.5%
    Discount factor0.96090.88720.81910.75630.6982-
    Present valueUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.6bn+0.1%
    Present Value Of The ForecastUSD 7.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.897Reported 0.847, pulled toward 1.0 (Blume)
    Cost of equity9.44%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 24.0bn81.2% of capital
    Total debtUSD 5.6bn18.8% of capital, book value as a proxy
    Tax rate23.6%Effective, capped at statutory
    WACC8.31%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 37.20

    80% of EV

    Forecast FCFF, final year
    USD 2.2bn
    Capex at depreciation, working capital in reinvestment
    USD 3.1bn
    Less reinvestment at g/ROIC (17.8% of NOPAT)
    USD -544.4m
    Capitalised
    USD 2.5bn
    ROIC (reported)
    14.0%
    Terminal value, undiscounted
    USD 44.2bn
    Terminal value, discounted
    USD 30.9bn
    Enterprise value
    USD 38.7bn
    Less net debt
    USD 5.2bn
    Equity value
    USD 33.4bn

    Exit at 10.0x EBITDA

    Value per shareUSD 35.33

    79% of EV

    Terminal value, undiscounted
    USD 41.8bn
    Terminal value, discounted
    USD 29.2bn
    Enterprise value
    USD 37.0bn
    Less net debt
    USD 5.2bn
    Equity value
    USD 31.8bn

    Spread between methods: 5%.

    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%
    6.31%51.8355.5660.2466.3174.50
    7.31%41.6043.7446.3249.4753.42
    8.31%34.3935.6937.2038.9841.11
    9.31%29.0429.8530.7731.8233.04
    10.31%24.9125.4325.9926.6327.35

    Outlined: this model. Green text: above today's price of 36.52. 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 year8.5%8.1%-0.4pp
    EBIT margin22.8%22.3%-0.5pp
    Discount rate8.3%8.4%+0.1pp
    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.