DCF Studio

    NEM.AX · ASX · Basic Materials

    Newmont Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 141.29

    Market price

    AUD 175.87

    Implied upside

    -19.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.

    Value Per Share

    Perpetuity growth
    AUD 141.29-19.7%
    Exit multiple
    AUD 338.22+92.3%
    Market price
    AUD 175.87

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn9bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 28.1bnUSD 34.8bnUSD 43.1bnUSD 53.4bnUSD 66.2bn+23.9%
    EBITUSD 7.0bnUSD 8.7bnUSD 10.8bnUSD 13.3bnUSD 16.5bn+23.9%
    NOPATUSD 4.9bnUSD 6.1bnUSD 7.5bnUSD 9.3bnUSD 11.6bn+23.9%
    Add depreciation & amortisationUSD 4.3bnUSD 5.3bnUSD 6.6bnUSD 8.2bnUSD 10.1bn+23.9%
    Less capital expenditureUSD -5.1bnUSD -6.3bnUSD -7.8bnUSD -9.6bnUSD -11.9bn+23.9%
    Less increase in working capitalUSD -285.5mUSD -353.8mUSD -438.4mUSD -543.2mUSD -673.1m+23.9%
    Free cashflow to firmUSD 3.8bnUSD 4.8bnUSD 5.9bnUSD 7.3bnUSD 9.1bn+23.9%
    Discount factor0.95630.87460.79990.73160.6690-
    Present valueUSD 3.7bnUSD 4.2bnUSD 4.7bnUSD 5.4bnUSD 6.1bn+13.3%
    Present Value Of The ForecastUSD 24.0bn

    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
    Beta0.694Reported 0.543, pulled toward 1.0 (Blume)
    Cost of equity9.51%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 185.3bn97.1% of capital
    Total debtUSD 5.6bn2.9% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC9.34%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 100.62

    78% of EV

    Forecast FCFF, final year
    USD 9.1bn
    Capex at depreciation, working capital in reinvestment
    USD 11.6bn
    Less reinvestment at g/ROIC (26.8% of NOPAT)
    USD -3.1bn
    Capitalised
    USD 8.5bn
    ROIC (WACC floor)
    9.3%
    Terminal value, undiscounted
    USD 126.8bn
    Terminal value, discounted
    USD 84.8bn
    Enterprise value
    USD 108.8bn
    Less net debt
    USD -2.7bn
    Equity value
    USD 111.5bn

    Exit at 13.5x EBITDA

    Value per shareUSD 240.87

    91% of EV

    Terminal value, undiscounted
    USD 359.1bn
    Terminal value, discounted
    USD 240.2bn
    Enterprise value
    USD 264.2bn
    Less net debt
    USD -2.7bn
    Equity value
    USD 266.9bn

    Spread between methods: 82%.

    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%
    7.34%131.06132.07133.18134.43135.88
    8.34%113.10113.53113.97114.41114.84
    9.34%99.87100.24100.62100.99101.36
    10.34%89.2689.5889.9090.2390.55
    11.34%80.5680.8581.1381.4181.70

    Outlined: this model. Green text: above today's price of 125.25. 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 year23.9%30.1%+6.2pp
    EBIT margin24.9%30.8%+5.9pp
    Discount rate9.3%7.7%-1.7pp
    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.