DCF Studio

    FLT.AX · ASX · Consumer Cyclical

    Flight Centre Travel Group Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 7.46

    Market price

    AUD 10.49

    Implied upside

    -28.9%

    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.

    Value Per Share

    Perpetuity growth
    AUD 7.46-28.9%
    Exit multiple
    AUD 10.85+3.4%
    Market price
    AUD 10.49

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0490921981843FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 3.1bnAUD 3.3bnAUD 3.6bnAUD 3.9bnAUD 4.2bn+7.8%
    EBITAUD 223.9mAUD 241.3mAUD 260.0mAUD 280.2mAUD 302.0m+7.8%
    NOPATAUD 156.7mAUD 168.9mAUD 182.0mAUD 196.2mAUD 211.4m+7.8%
    Add depreciation & amortisationAUD 177.9mAUD 191.7mAUD 206.6mAUD 222.6mAUD 240.0m+7.8%
    Less capital expenditureAUD -112.0mAUD -120.7mAUD -130.1mAUD -140.2mAUD -151.1m+7.8%
    Less increase in working capitalAUD -221.8mAUD -239.1mAUD -257.7mAUD -277.7mAUD -299.3m+7.8%
    Free cashflow to firmAUD 727.8kAUD 784.4kAUD 845.4kAUD 911.0kAUD 981.8k+7.8%
    Discount factor0.96340.89420.82990.77030.7149-
    Present valueAUD 701.2kAUD 701.4kAUD 701.6kAUD 701.8kAUD 702.0k+0.0%
    Present Value Of The ForecastAUD 3.5m

    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
    Beta0.739Reported 0.611, pulled toward 1.0 (Blume)
    Cost of equity9.78%Risk-free + beta x equity risk premium
    Cost of debt5.99%Interest expense / average total debt
    Market capitalisationAUD 2.1bn63.5% of capital
    Total debtAUD 1.2bn36.5% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC7.74%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 7.46

    100% of EV

    Forecast FCFF, final year
    AUD 981.8k
    Capex at depreciation, working capital in reinvestment
    AUD 211.4m
    Less reinvestment at g/ROIC (32.1% of NOPAT)
    AUD -67.9m
    Capitalised
    AUD 143.6m
    ROIC (reported)
    7.8%
    Terminal value, undiscounted
    AUD 2.8bn
    Terminal value, discounted
    AUD 2.0bn
    Enterprise value
    AUD 2.0bn
    Less net debt
    AUD 409.8m
    Equity value
    AUD 1.6bn

    Exit at 7.1x EBITDA

    Value per shareAUD 10.85

    100% of EV

    Terminal value, undiscounted
    AUD 3.8bn
    Terminal value, discounted
    AUD 2.7bn
    Enterprise value
    AUD 2.7bn
    Less net debt
    AUD 409.8m
    Equity value
    AUD 2.3bn

    Spread between methods: 37%.

    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%
    5.74%12.9113.6314.5615.8017.58
    6.74%9.599.8510.1610.5411.02
    7.74%7.357.407.467.517.57
    8.74%5.955.996.036.076.10
    9.74%4.864.894.934.964.99

    Outlined: this model. Green text: above today's price of 10.49. 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 year7.8%-29.2%-37.0pp
    EBIT margin7.3%9.0%+1.7pp
    Discount rate7.7%6.6%-1.1pp
    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.