DCF Studio

    MFT.NZ · NZE · Industrials

    Mainfreight Limited

    Also onConsensus Drift

    Implied value per share

    NZD 32.83

    Market price

    NZD 65.08

    Implied upside

    -49.6%

    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 32.83-49.6%
    Exit multiple
    NZD 53.77-17.4%
    Market price
    NZD 65.08

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (NZD). Outflows negative.

    0m192m385mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayNZD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueNZD 5.3bnNZD 5.2bnNZD 5.1bnNZD 5.0bnNZD 4.9bn-1.7%
    EBITNZD 472.3mNZD 464.0mNZD 455.9mNZD 447.9mNZD 440.1m-1.7%
    NOPATNZD 340.0mNZD 334.1mNZD 328.3mNZD 322.5mNZD 316.9m-1.7%
    Add depreciation & amortisationNZD 306.9mNZD 301.6mNZD 296.3mNZD 291.1mNZD 286.1m-1.7%
    Less capital expenditureNZD -265.2mNZD -260.5mNZD -256.0mNZD -251.5mNZD -247.1m-1.7%
    Less increase in working capitalNZD 3.1mNZD 3.0mNZD 3.0mNZD 2.9mNZD 2.9m+1.7%
    Free cashflow to firmNZD 384.9mNZD 378.1mNZD 371.5mNZD 365.1mNZD 358.7m-1.7%
    Discount factor0.95960.88350.81350.74910.6897-
    Present valueNZD 369.3mNZD 334.1mNZD 302.3mNZD 273.4mNZD 247.4m-9.5%
    Present Value Of The ForecastNZD 1.5bn

    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
    Beta0.812Reported 0.719, pulled toward 1.0 (Blume)
    Cost of equity9.78%Risk-free + beta x equity risk premium
    Cost of debt4.50%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationNZD 6.6bn82.1% of capital
    Total debtNZD 1.4bn17.9% of capital, book value as a proxy
    Tax rate28.0%Effective, capped at statutory
    WACC8.61%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 32.83

    67% of EV

    Forecast FCFF, final year
    NZD 358.7m
    Capex at depreciation, working capital in reinvestment
    NZD 316.9m
    Less reinvestment at g/ROIC (17.0% of NOPAT)
    NZD -53.8m
    Capitalised
    NZD 263.1m
    ROIC (reported)
    14.7%
    Terminal value, undiscounted
    NZD 4.4bn
    Terminal value, discounted
    NZD 3.0bn
    Enterprise value
    NZD 4.6bn
    Less net debt
    NZD 1.3bn
    Equity value
    NZD 3.3bn

    Exit at 10.3x EBITDA

    Value per shareNZD 53.77

    77% of EV

    Terminal value, undiscounted
    NZD 7.5bn
    Terminal value, discounted
    NZD 5.2bn
    Enterprise value
    NZD 6.7bn
    Less net debt
    NZD 1.3bn
    Equity value
    NZD 5.4bn

    Spread between methods: 48%.

    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%
    6.61%45.3848.4152.1656.9263.20
    7.61%36.6838.4840.6243.2046.39
    8.61%30.4231.5432.8334.3336.12
    9.61%25.6826.4027.2028.1229.18
    10.61%21.9722.4322.9523.5224.16

    Outlined: this model. Green text: above today's price of 65.08. 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-1.7%11.5%+13.2pp
    EBIT margin8.9%15.5%+6.6pp
    Discount rate8.6%5.9%-2.7pp
    Download as Excel

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