DCF Studio

    FOXA · NMS · Communication Services

    Fox Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 105.38

    Market price

    USD 64.45

    Implied upside

    +63.5%

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

    Value Per Share

    Perpetuity growth
    USD 105.38+63.5%
    Exit multiple
    USD 81.45+26.4%
    Market price
    USD 64.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueUSD 17.9bnUSD 18.8bnUSD 19.7bnUSD 20.6bnUSD 21.6bn+4.7%
    EBITUSD 3.4bnUSD 3.6bnUSD 3.8bnUSD 3.9bnUSD 4.1bn+4.7%
    NOPATUSD 2.7bnUSD 2.8bnUSD 3.0bnUSD 3.1bnUSD 3.3bn+4.7%
    Add depreciation & amortisationUSD 461.6mUSD 483.4mUSD 506.2mUSD 530.1mUSD 555.1m+4.7%
    Less capital expenditureUSD -440.4mUSD -461.2mUSD -483.0mUSD -505.8mUSD -529.7m+4.7%
    Less increase in working capitalUSD 165.9mUSD 173.7mUSD 181.9mUSD 190.5mUSD 199.5m-4.7%
    Free cashflow to firmUSD 2.9bnUSD 3.0bnUSD 3.2bnUSD 3.3bnUSD 3.5bn+4.7%
    Discount factor0.96290.89280.82770.76740.7115-
    Present valueUSD 2.8bnUSD 2.7bnUSD 2.6bnUSD 2.6bnUSD 2.5bn-2.9%
    Present Value Of The ForecastUSD 13.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.705Reported 0.559, pulled toward 1.0 (Blume)
    Cost of equity8.87%Risk-free + beta x equity risk premium
    Cost of debt5.33%Interest expense / average total debt
    Market capitalisationUSD 27.1bn78.2% of capital
    Total debtUSD 7.6bn21.8% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.86%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 105.38

    73% of EV

    Forecast FCFF, final year
    USD 3.5bn
    Capex at depreciation, working capital in reinvestment
    USD 3.3bn
    Less reinvestment at g/ROIC (19.1% of NOPAT)
    USD -632.9m
    Capitalised
    USD 2.7bn
    ROIC (reported)
    13.1%
    Terminal value, undiscounted
    USD 51.3bn
    Terminal value, discounted
    USD 36.5bn
    Enterprise value
    USD 49.6bn
    Less net debt
    USD 3.4bn
    Equity value
    USD 46.3bn

    Exit at 7.8x EBITDA

    Value per shareUSD 81.45

    66% of EV

    Terminal value, undiscounted
    USD 36.5bn
    Terminal value, discounted
    USD 26.0bn
    Enterprise value
    USD 39.1bn
    Less net debt
    USD 3.4bn
    Equity value
    USD 35.8bn

    Spread between methods: 26%.

    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%
    5.86%144.16154.54167.95185.98211.57
    6.86%116.89122.58129.52138.20149.41
    7.86%98.18101.49105.38110.03115.70
    8.86%84.5386.5288.8091.4294.51
    9.86%74.1375.3476.6978.2079.93

    Outlined: this model. Green text: above today's price of 64.45. 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 year4.7%-4.7%-9.4pp
    EBIT margin19.1%12.0%-7.1pp
    Discount rate7.9%11.2%+3.4pp
    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.