DCF Studio

    NTR.TO · TOR · Basic Materials

    Nutrien Ltd.

    Also onConsensus Drift

    Implied value per share

    CAD 43.57

    Market price

    CAD 107.95

    Implied upside

    -59.6%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 43.57-59.6%
    Exit multiple
    CAD 71.51-33.8%
    Market price
    CAD 107.95

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 24.0bnUSD 21.4bnUSD 19.1bnUSD 17.0bnUSD 15.2bn-10.8%
    EBITUSD 4.0bnUSD 3.5bnUSD 3.1bnUSD 2.8bnUSD 2.5bn-10.8%
    NOPATUSD 2.9bnUSD 2.6bnUSD 2.3bnUSD 2.1bnUSD 1.8bn-10.8%
    Add depreciation & amortisationUSD 1.8bnUSD 1.6bnUSD 1.5bnUSD 1.3bnUSD 1.2bn-10.8%
    Less capital expenditureUSD -1.9bnUSD -1.7bnUSD -1.5bnUSD -1.3bnUSD -1.2bn-10.8%
    Less increase in working capitalUSD 166.8mUSD 148.8mUSD 132.7mUSD 118.4mUSD 105.6m+10.8%
    Free cashflow to firmUSD 3.0bnUSD 2.7bnUSD 2.4bnUSD 2.2bnUSD 1.9bn-10.8%
    Discount factor0.96150.88880.82160.75950.7020-
    Present valueUSD 2.9bnUSD 2.4bnUSD 2.0bnUSD 1.6bnUSD 1.3bn-17.5%
    Present Value Of The ForecastUSD 10.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.051Reported 1.076, pulled toward 1.0 (Blume)
    Cost of equity9.08%Risk-free + beta x equity risk premium
    Cost of debt5.87%Interest expense / average total debt
    Market capitalisationUSD 51.5bn81.1% of capital
    Total debtUSD 12.0bn18.9% of capital, book value as a proxy
    Tax rate26.5%Effective, capped at statutory
    WACC8.18%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 31.16

    61% of EV

    Forecast FCFF, final year
    USD 1.9bn
    Capex at depreciation, working capital in reinvestment
    USD 1.8bn
    Less reinvestment at g/ROIC (30.6% of NOPAT)
    USD -562.3m
    Capitalised
    USD 1.3bn
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    USD 23.1bn
    Terminal value, discounted
    USD 16.2bn
    Enterprise value
    USD 26.5bn
    Less net debt
    USD 11.3bn
    Equity value
    USD 15.2bn

    Exit at 10.1x EBITDA

    Value per shareUSD 51.14

    72% of EV

    Terminal value, undiscounted
    USD 36.9bn
    Terminal value, discounted
    USD 25.9bn
    Enterprise value
    USD 36.2bn
    Less net debt
    USD 11.3bn
    Equity value
    USD 24.9bn

    Spread between methods: 49%.

    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%
    6.18%49.4051.2553.5456.5160.51
    7.18%38.3238.9239.6240.4341.42
    8.18%30.8331.0031.1631.3231.48
    9.18%25.6525.7925.9326.0626.20
    10.18%21.4721.5921.7121.8321.95

    Outlined: this model. Green text: above today's price of 77.21. 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-10.8%3.7%+14.5pp
    EBIT margin16.5%30.7%+14.2pp
    Discount rate8.2%5.2%-3.0pp
    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.