DCF Studio

    J36.SI · SES · Industrials

    Jardine Matheson Holdings Limited

    Also onConsensus Drift

    Implied value per share

    USD 127.44

    Market price

    USD 57.54

    Implied upside

    +121.5%

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

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

    Value Per Share

    Perpetuity growth
    USD 127.44+121.5%
    Exit multiple
    USD 61.27+6.5%
    Market price
    USD 57.54

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 33.2bnUSD 32.2bnUSD 31.2bnUSD 30.3bnUSD 29.4bn-3.0%
    EBITUSD 3.4bnUSD 3.3bnUSD 3.2bnUSD 3.1bnUSD 3.0bn-3.0%
    NOPATUSD 2.6bnUSD 2.5bnUSD 2.4bnUSD 2.4bnUSD 2.3bn-3.0%
    Add depreciation & amortisationUSD 2.0bnUSD 1.9bnUSD 1.9bnUSD 1.8bnUSD 1.8bn-3.0%
    Less capital expenditureUSD -1.3bnUSD -1.3bnUSD -1.3bnUSD -1.2bnUSD -1.2bn-3.0%
    Less increase in working capitalUSD -765.8mUSD -742.8mUSD -720.5mUSD -698.9mUSD -677.9m-3.0%
    Free cashflow to firmUSD 2.4bnUSD 2.4bnUSD 2.3bnUSD 2.2bnUSD 2.2bn-3.0%
    Discount factor0.97310.92160.87270.82650.7827-
    Present valueUSD 2.4bnUSD 2.2bnUSD 2.0bnUSD 1.8bnUSD 1.7bn-8.1%
    Present Value Of The ForecastUSD 10.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.619Reported 0.432, pulled toward 1.0 (Blume)
    Cost of equity8.23%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 16.9bn48.2% of capital
    Total debtUSD 18.2bn51.8% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC5.60%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 127.44

    78% of EV

    Forecast FCFF, final year
    USD 2.2bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (40.7% of NOPAT)
    USD -969.4m
    Capitalised
    USD 1.4bn
    ROIC (reported)
    6.1%
    Terminal value, undiscounted
    USD 46.7bn
    Terminal value, discounted
    USD 36.6bn
    Enterprise value
    USD 46.7bn
    Less net debt
    USD 9.2bn
    Equity value
    USD 37.5bn

    Exit at 4.5x EBITDA

    Value per shareUSD 61.27

    63% of EV

    Terminal value, undiscounted
    USD 21.8bn
    Terminal value, discounted
    USD 17.1bn
    Enterprise value
    USD 27.2bn
    Less net debt
    USD 9.2bn
    Equity value
    USD 18.0bn

    Spread between methods: 70%.

    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%
    3.60%257.40302.26387.56615.133217.24
    4.60%167.72179.07195.58222.11272.35
    5.60%121.75124.27127.44131.63137.58
    6.60%95.8196.2796.7497.2097.66
    7.60%79.4679.8480.2280.6180.99

    Outlined: this model. Green text: above today's price of 57.54. 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 year-3.0%-10.2%-7.2pp
    EBIT margin10.4%5.7%-4.7pp
    Discount rate5.6%9.6%+4.0pp
    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.