DCF Studio

    OMC · NYQ · Communication Services

    Omnicom Group Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 165.65

    Market price

    USD 83.99

    Implied upside

    +97.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.71% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 37.3x 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 165.65+97.2%
    Exit multiple
    USD 220.42+162.4%
    Market price
    USD 83.99

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 25.9bnUSD 25.0bnUSD 24.3bnUSD 23.8bnUSD 23.5bnUSD 23.4bnUSD 23.4bnUSD 23.7bnUSD 24.1bnUSD 24.7bn-0.5%
    EBITUSD 3.0bnUSD 2.9bnUSD 2.8bnUSD 2.7bnUSD 2.7bnUSD 2.7bnUSD 2.7bnUSD 2.7bnUSD 2.8bnUSD 2.8bn-0.5%
    NOPATUSD 2.4bnUSD 2.3bnUSD 2.2bnUSD 2.2bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.2bn-0.5%
    Add depreciation & amortisationUSD 396.1mUSD 382.1mUSD 371.5mUSD 364.0mUSD 359.4mUSD 357.6mUSD 358.5mUSD 362.0mUSD 368.4mUSD 377.6m-0.5%
    Less capital expenditureUSD -259.1mUSD -284.5mUSD -310.2mUSD -336.8mUSD -365.1mUSD -395.5mUSD -428.9mUSD -465.9mUSD -507.3mUSD -554.1m+8.8%
    Capex, % of revenue1.0%1.1%1.3%1.4%1.6%1.7%1.8%2.0%2.1%2.2%-
    Less increase in working capitalUSD 977.7mUSD -103.3mUSD -78.4mUSD -55.5mUSD -34.1mUSD -13.6mUSD 6.4mUSD 26.4mUSD 46.8mUSD 68.2m+25.6%
    Free cashflow to firmUSD 3.5bnUSD 2.3bnUSD 2.2bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bnUSD 2.1bn-5.2%
    Discount factor0.96470.89790.83560.77770.72380.67370.62700.58350.54310.5054-
    Present valueUSD 3.3bnUSD 2.0bnUSD 1.8bnUSD 1.7bnUSD 1.5bnUSD 1.4bnUSD 1.3bnUSD 1.2bnUSD 1.1bnUSD 1.1bn-
    Present Value Of The ForecastUSD 16.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.824Reported 0.737, pulled toward 1.0 (Blume)
    Cost of equity8.38%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a B rating at 1.7x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 3.0%.
    Market capitalisationUSD 23.0bn68.2% of capital
    Total debtUSD 10.7bn31.8% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.45%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 165.65

    56% of EV

    Forecast FCFF, final year
    USD 2.1bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (14.1% of NOPAT)
    USD -333.6m
    Capitalised
    USD 2.0bn
    ROIC (reported)
    17.7%
    Terminal value, undiscounted
    USD 42.1bn
    Terminal value, discounted
    USD 21.3bn
    Enterprise value
    USD 37.8bn
    Less net debt
    USD 3.9bn
    Equity value
    USD 33.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 220.42

    66% of EV

    Terminal value, undiscounted
    USD 64.3bn
    Terminal value, discounted
    USD 32.5bn
    Enterprise value
    USD 49.0bn
    Less net debt
    USD 3.9bn
    Equity value
    USD 45.2bn

    Spread between methods: 28%.

    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%
    5.45%234.77252.60276.79311.25363.86
    6.45%186.81195.77207.23222.26242.68
    7.45%154.91159.71165.65173.11182.67
    8.45%132.14134.76137.95141.87146.73
    9.45%115.06116.44118.14120.21122.74

    Outlined: this model. Green text: above today's price of 83.99. 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.

    InputActualModelImplied
    Revenue growth, a year6.5%3.6%-3.1%
    EBIT margin14.6%11.5%6.0%
    Discount rate-7.4%12.2%
    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.