DCF Studio

    K.TO · TOR · Basic Materials

    Kinross Gold Corporation

    Also onConsensus Drift

    Implied value per share

    CAD 42.33

    Market price

    CAD 39.25

    Implied upside

    +7.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 42.33+7.9%
    Exit multiple
    CAD 92.98+136.9%
    Market price
    CAD 39.25

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 8.9bnUSD 11.3bnUSD 14.4bnUSD 18.3bnUSD 23.2bn+26.8%
    EBITUSD 2.1bnUSD 2.7bnUSD 3.4bnUSD 4.4bnUSD 5.5bn+26.8%
    NOPATUSD 1.6bnUSD 2.0bnUSD 2.5bnUSD 3.2bnUSD 4.1bn+26.8%
    Add depreciation & amortisationUSD 1.9bnUSD 2.4bnUSD 3.0bnUSD 3.8bnUSD 4.9bn+26.8%
    Less capital expenditureUSD -1.9bnUSD -2.4bnUSD -3.1bnUSD -3.9bnUSD -5.0bn+26.8%
    Less increase in working capitalUSD 141.2mUSD 179.0mUSD 227.1mUSD 288.1mUSD 365.4m-26.8%
    Free cashflow to firmUSD 1.7bnUSD 2.1bnUSD 2.7bnUSD 3.4bnUSD 4.3bn+26.8%
    Discount factor0.95140.86110.77950.70550.6386-
    Present valueUSD 1.6bnUSD 1.8bnUSD 2.1bnUSD 2.4bnUSD 2.8bn+14.8%
    Present Value Of The ForecastUSD 10.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.320Reported 1.477, pulled toward 1.0 (Blume)
    Cost of equity10.56%Risk-free + beta x equity risk premium
    Cost of debt7.53%Interest expense / average total debt
    Market capitalisationUSD 46.6bn98.4% of capital
    Total debtUSD 738.2m1.6% of capital, book value as a proxy
    Tax rate26.5%Effective, capped at statutory
    WACC10.48%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 30.28

    70% of EV

    Forecast FCFF, final year
    USD 4.3bn
    Capex at depreciation, working capital in reinvestment
    USD 4.1bn
    Less reinvestment at g/ROIC (23.9% of NOPAT)
    USD -970.2m
    Capitalised
    USD 3.1bn
    ROIC (WACC floor)
    10.5%
    Terminal value, undiscounted
    USD 39.8bn
    Terminal value, discounted
    USD 25.4bn
    Enterprise value
    USD 36.1bn
    Less net debt
    USD -1.0bn
    Equity value
    USD 37.1bn

    Exit at 10.5x EBITDA

    Value per shareUSD 66.50

    87% of EV

    Terminal value, undiscounted
    USD 109.2bn
    Terminal value, discounted
    USD 69.8bn
    Enterprise value
    USD 80.4bn
    Less net debt
    USD -1.0bn
    Equity value
    USD 81.4bn

    Spread between methods: 75%.

    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%
    8.48%38.5439.1239.7740.5241.40
    9.48%33.7233.9734.2434.5334.85
    10.48%30.0730.1730.2830.3830.48
    11.48%27.3227.4127.5027.5927.68
    12.48%25.0225.1025.1825.2625.34

    Outlined: this model. Green text: above today's price of 28.07. 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 year26.8%24.7%-2.1pp
    EBIT margin23.9%22.1%-1.8pp
    Discount rate10.5%11.3%+0.8pp
    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.