DCF Studio

    MTD · NYQ · Healthcare

    Mettler-Toledo International Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 456.20

    Market price

    USD 1392.32

    Implied upside

    -67.2%

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

    Current EV/EBITDA of 24.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 456.20-67.2%
    Exit multiple
    USD 894.14-35.8%
    Market price
    USD 1392.32

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m492m985mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 4.1bnUSD 4.1bnUSD 4.1bnUSD 4.2bnUSD 4.2bn+0.9%
    EBITUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bn+0.9%
    NOPATUSD 952.5mUSD 961.1mUSD 969.7mUSD 978.4mUSD 987.2m+0.9%
    Add depreciation & amortisationUSD 125.8mUSD 126.9mUSD 128.0mUSD 129.2mUSD 130.4m+0.9%
    Less capital expenditureUSD -113.9mUSD -114.9mUSD -116.0mUSD -117.0mUSD -118.1m+0.9%
    Less increase in working capitalUSD -14.2mUSD -14.3mUSD -14.4mUSD -14.5mUSD -14.7m+0.9%
    Free cashflow to firmUSD 950.2mUSD 958.7mUSD 967.4mUSD 976.1mUSD 984.8m+0.9%
    Discount factor0.95000.85750.77400.69860.6305-
    Present valueUSD 902.7mUSD 822.1mUSD 748.7mUSD 681.8mUSD 621.0m-8.9%
    Present Value Of The ForecastUSD 3.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.147Reported 1.220, pulled toward 1.0 (Blume)
    Cost of equity11.31%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 27.9bn92.8% of capital
    Total debtUSD 2.2bn7.2% of capital, book value as a proxy
    Tax rate17.8%Effective, capped at statutory
    WACC10.79%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 456.20

    67% of EV

    Forecast FCFF, final year
    USD 984.8m
    Capex at depreciation, working capital in reinvestment
    USD 1.1bn
    Less reinvestment at g/ROIC (5.5% of NOPAT)
    USD -57.5m
    Capitalised
    USD 993.1m
    ROIC (reported)
    45.7%
    Terminal value, undiscounted
    USD 12.3bn
    Terminal value, discounted
    USD 7.7bn
    Enterprise value
    USD 11.5bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 9.4bn

    Exit at 20.0x EBITDA

    Value per shareUSD 894.14

    82% of EV

    Terminal value, undiscounted
    USD 26.6bn
    Terminal value, discounted
    USD 16.8bn
    Enterprise value
    USD 20.6bn
    Less net debt
    USD 2.1bn
    Equity value
    USD 18.5bn

    Spread between methods: 65%.

    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%
    8.79%557.93589.15625.27667.56717.77
    9.79%480.83503.47529.16558.58592.62
    10.79%420.32437.26456.21477.53501.74
    11.79%371.58384.57398.93414.89432.72
    12.79%331.47341.64352.77365.00378.52

    Outlined: this model. Green text: above today's price of 1392.32. 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 year0.9%28.4%+27.5pp
    EBIT margin28.5%78.5%+49.9pp
    Discount rate10.8%5.5%-5.3pp
    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.