DCF Studio

    KIM · NYQ · Real Estate

    Kimco Realty Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 5.53

    Market price

    USD 22.53

    Implied upside

    -75.4%

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

    AdjustedReported capital expenditure averages just 0.00% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 29.15% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 5.53-75.4%
    Exit multiple
    USD 26.93+19.5%
    Market price
    USD 22.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m473m947mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 2.8bnUSD 3.1bn+7.4%
    EBITUSD 756.2mUSD 812.1mUSD 872.2mUSD 936.7mUSD 1.0bn+7.4%
    NOPATUSD 756.2mUSD 812.1mUSD 872.2mUSD 936.7mUSD 1.0bn+7.4%
    Add depreciation & amortisationUSD 649.1mUSD 697.1mUSD 748.7mUSD 804.1mUSD 863.6m+7.4%
    Less capital expenditureUSD -670.1mUSD -719.6mUSD -772.8mUSD -830.0mUSD -891.4m+7.4%
    Less increase in working capitalUSD -23.8mUSD -25.5mUSD -27.4mUSD -29.5mUSD -31.6m+7.4%
    Free cashflow to firmUSD 711.5mUSD 764.1mUSD 820.7mUSD 881.4mUSD 946.5m+7.4%
    Discount factor0.96030.88550.81660.75300.6944-
    Present valueUSD 683.2mUSD 676.7mUSD 670.1mUSD 663.7mUSD 657.3m-1.0%
    Present Value Of The ForecastUSD 3.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.971Reported 0.956, pulled toward 1.0 (Blume)
    Cost of equity10.34%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 15.1bn64.5% of capital
    Total debtUSD 8.3bn35.5% of capital, book value as a proxy
    Tax rate0.0%Effective, capped at statutory
    WACC8.44%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 5.53

    72% of EV

    Forecast FCFF, final year
    USD 946.5m
    Capex at depreciation, working capital in reinvestment
    USD 1.0bn
    Less reinvestment at g/ROIC (29.6% of NOPAT)
    USD -297.9m
    Capitalised
    USD 708.1m
    ROIC (WACC floor)
    8.4%
    Terminal value, undiscounted
    USD 12.2bn
    Terminal value, discounted
    USD 8.5bn
    Enterprise value
    USD 11.8bn
    Less net debt
    USD 8.1bn
    Equity value
    USD 3.7bn

    Exit at 17.7x EBITDA

    Value per shareUSD 26.93

    87% of EV

    Terminal value, undiscounted
    USD 33.0bn
    Terminal value, discounted
    USD 22.9bn
    Enterprise value
    USD 26.3bn
    Less net debt
    USD 8.1bn
    Equity value
    USD 18.2bn

    Spread between methods: 132%.

    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%
    6.44%10.9311.0211.1111.2011.28
    7.44%7.807.877.948.028.09
    8.44%5.415.475.535.605.66
    9.44%3.533.593.643.693.74
    10.44%2.022.062.112.162.20

    Outlined: this model. Green text: above today's price of 22.53. 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 year7.4%25.2%+17.8pp
    EBIT margin32.9%64.3%+31.4pp
    Discount rate8.4%4.3%-4.1pp
    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.