DCF Studio

    GNE.NZ · NZE · Utilities

    Genesis Energy Limited

    Also onConsensus Drift

    Implied value per share

    NZD 1.86

    Market price

    NZD 2.61

    Implied upside

    -28.6%

    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.
    NoteRisk-free rate is an assumption: NZD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    NZD 1.86-28.6%
    Exit multiple
    NZD 3.21+22.9%
    Market price
    NZD 2.61

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m139m277mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 3.0bnNZD 3.2bnNZD 3.3bnNZD 3.5bnNZD 3.7bn+5.7%
    EBITNZD 209.9mNZD 221.9mNZD 234.7mNZD 248.2mNZD 262.4m+5.7%
    NOPATNZD 151.1mNZD 159.8mNZD 169.0mNZD 178.7mNZD 188.9m+5.7%
    Add depreciation & amortisationNZD 251.3mNZD 265.8mNZD 281.0mNZD 297.2mNZD 314.2m+5.7%
    Less capital expenditureNZD -166.2mNZD -175.7mNZD -185.8mNZD -196.5mNZD -207.8m+5.7%
    Less increase in working capitalNZD -14.4mNZD -15.3mNZD -16.1mNZD -17.1mNZD -18.1m+5.7%
    Free cashflow to firmNZD 221.8mNZD 234.6mNZD 248.0mNZD 262.3mNZD 277.3m+5.7%
    Discount factor0.96760.90580.84800.79380.7432-
    Present valueNZD 214.6mNZD 212.5mNZD 210.3mNZD 208.2mNZD 206.1m-1.0%
    Present Value Of The ForecastNZD 1.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%NZD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.535Reported 0.306, pulled toward 1.0 (Blume)
    Cost of equity7.98%Risk-free + beta x equity risk premium
    Cost of debt4.64%Interest expense / average total debt
    Market capitalisationNZD 3.4bn75.0% of capital
    Total debtNZD 1.1bn25.0% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC6.82%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 shareNZD 1.86

    67% of EV

    Forecast FCFF, final year
    NZD 277.3m
    Capex at depreciation, working capital in reinvestment
    NZD 188.9m
    Less reinvestment at g/ROIC (36.7% of NOPAT)
    NZD -69.3m
    Capitalised
    NZD 119.7m
    ROIC (WACC floor)
    6.8%
    Terminal value, undiscounted
    NZD 2.8bn
    Terminal value, discounted
    NZD 2.1bn
    Enterprise value
    NZD 3.2bn
    Less net debt
    NZD 993.4m
    Equity value
    NZD 2.2bn

    Exit at 8.6x EBITDA

    Value per shareNZD 3.21

    78% of EV

    Terminal value, undiscounted
    NZD 4.9bn
    Terminal value, discounted
    NZD 3.7bn
    Enterprise value
    NZD 4.7bn
    Less net debt
    NZD 993.4m
    Equity value
    NZD 3.7bn

    Spread between methods: 53%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.82%2.862.872.892.902.91
    5.82%2.272.282.292.302.31
    6.82%1.851.851.861.871.88
    7.82%1.531.541.551.551.56
    8.82%1.291.291.301.311.31

    Outlined: this model. Green text: above today's price of 2.61. 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 year5.7%12.3%+6.6pp
    EBIT margin7.0%9.2%+2.2pp
    Discount rate6.8%5.2%-1.6pp
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.