DCF Studio

    LTR.AX · ASX · Basic Materials

    Liontown Limited

    Also onConsensus Drift

    Implied value per share

    AUD -1.51

    Market price

    AUD 1.02

    Implied upside

    -248.4%

    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.
    AdjustedOnly 2 year(s) of history available to anchor assumptions on.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 66.1% of revenue against depreciation of 36.9%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    AUD -1.51-248.4%
    Exit multiple
    AUD 0.08-92.6%
    Market price
    AUD 1.02

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    -2643144004-13215720020FY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 958.7mAUD 1.4bnAUD 2.2bnAUD 3.2bnAUD 4.9bn+50.0%
    EBITAUD -262.1mAUD -393.1mAUD -589.7mAUD -884.5mAUD -1.3bn-50.0%
    NOPATAUD -183.5mAUD -275.2mAUD -412.8mAUD -619.2mAUD -928.7m-50.0%
    Add depreciation & amortisationAUD 353.9mAUD 530.8mAUD 796.2mAUD 1.2bnAUD 1.8bn+50.0%
    Less capital expenditureAUD -633.2mAUD -949.9mAUD -1.4bnAUD -2.1bnAUD -3.2bn+50.0%
    Less increase in working capitalAUD -59.3mAUD -88.9mAUD -133.4mAUD -200.0mAUD -300.0m+50.0%
    Free cashflow to firmAUD -522.1mAUD -783.2mAUD -1.2bnAUD -1.8bnAUD -2.6bn-50.0%
    Discount factor0.94680.84870.76080.68200.6113-
    Present valueAUD -494.3mAUD -664.7mAUD -893.7mAUD -1.2bnAUD -1.6bn-34.5%
    Present Value Of The ForecastAUD -4.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta1.237Reported 1.353, pulled toward 1.0 (Blume)
    Cost of equity12.77%Risk-free + beta x equity risk premium
    Cost of debt5.36%Interest expense / average total debt
    Market capitalisationAUD 3.3bn86.6% of capital
    Total debtAUD 504.8m13.4% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC11.56%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 shareAUD -1.51

    0% of EV

    Terminal value, undiscounted
    AUD 0.00
    Terminal value, discounted
    AUD 0.00
    Enterprise value
    AUD -4.9bn
    Less net debt
    AUD -57.1m
    Equity value
    AUD -4.8bn

    Exit at 17.8x EBITDA

    Value per shareAUD 0.08

    2774% of EV

    Terminal value, undiscounted
    AUD 8.3bn
    Terminal value, discounted
    AUD 5.1bn
    Enterprise value
    AUD 182.1m
    Less net debt
    AUD -57.1m
    Equity value
    AUD 239.2m

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.56%-1.60-1.60-1.60-1.60-1.60
    10.56%-1.56-1.56-1.56-1.56-1.56
    11.56%-1.51-1.51-1.51-1.51-1.51
    12.56%-1.47-1.47-1.47-1.47-1.47
    13.56%-1.43-1.43-1.43-1.43-1.43

    Outlined: this model. Green text: above today's price of 1.02. 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
    EBIT margin-27.3%25.7%+53.0pp
    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.