DCF Studio

    FRES.L · LSE · Basic Materials

    Fresnillo plc

    Also onConsensus Drift

    Implied value per share

    GBp 5395.58

    Market price

    GBp 3035.00

    Implied upside

    +77.8%

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

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    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.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    GBp 5395.58+77.8%
    Exit multiple
    GBp 4202.30+38.5%
    Market price
    GBp 3035.00

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 5.6bnUSD 6.9bnUSD 8.6bnUSD 10.5bnUSD 13.0bn+23.3%
    EBITUSD 1.3bnUSD 1.6bnUSD 2.0bnUSD 2.5bnUSD 3.1bn+23.3%
    NOPATUSD 997.8mUSD 1.2bnUSD 1.5bnUSD 1.9bnUSD 2.3bn+23.3%
    Add depreciation & amortisationUSD 950.3mUSD 1.2bnUSD 1.4bnUSD 1.8bnUSD 2.2bn+23.3%
    Less capital expenditureUSD -865.8mUSD -1.1bnUSD -1.3bnUSD -1.6bnUSD -2.0bn+23.3%
    Less increase in working capitalUSD -127.9mUSD -157.7mUSD -194.5mUSD -239.8mUSD -295.7m+23.3%
    Free cashflow to firmUSD 954.4mUSD 1.2bnUSD 1.5bnUSD 1.8bnUSD 2.2bn+23.3%
    Discount factor0.97340.92220.87370.82770.7842-
    Present valueUSD 929.0mUSD 1.1bnUSD 1.3bnUSD 1.5bnUSD 1.7bn+16.8%
    Present Value Of The ForecastUSD 6.5bn

    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
    Beta0.817Reported 0.727, pulled toward 1.0 (Blume)
    Cost of equity8.99%Risk-free + beta x equity risk premium
    Cost of debt7.40%Interest expense / average total debt
    Market capitalisationUSD 0.000.0% of capital
    Total debtUSD 851.0m100.0% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC5.55%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 72.27

    87% of EV

    Forecast FCFF, final year
    USD 2.2bn
    Capex at depreciation, working capital in reinvestment
    USD 2.3bn
    Less reinvestment at g/ROIC (26.2% of NOPAT)
    USD -604.6m
    Capitalised
    USD 1.7bn
    ROIC (reported)
    9.5%
    Terminal value, undiscounted
    USD 57.2bn
    Terminal value, discounted
    USD 44.9bn
    Enterprise value
    USD 51.3bn
    Less net debt
    USD -1.9bn
    Equity value
    USD 53.3bn

    Exit at 8.0x EBITDA

    Value per shareUSD 56.28

    84% of EV

    Terminal value, undiscounted
    USD 42.2bn
    Terminal value, discounted
    USD 33.1bn
    Enterprise value
    USD 39.6bn
    Less net debt
    USD -1.9bn
    Equity value
    USD 41.5bn

    Spread between methods: 25%.

    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%
    3.55%123.51151.01204.57355.203503.81
    4.55%83.4992.63106.16128.33171.49
    5.55%63.2467.1372.2779.3689.85
    6.55%51.0252.8555.1057.9661.71
    7.55%42.8443.7144.7345.9547.44

    Outlined: this model. Green text: above today's price of 40.65. 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 year23.3%8.3%-15.0pp
    EBIT margin23.7%13.0%-10.7pp
    Discount rate5.6%8.1%+2.5pp
    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.