DCF Studio

    PPL · NYQ · Utilities

    PPL Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 7.35

    Market price

    USD 36.14

    Implied upside

    -79.6%

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

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 33.4% of revenue against depreciation of 15.8%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 7.35-79.6%
    Exit multiple
    USD 27.87-22.9%
    Market price
    USD 36.14

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 9.6bnUSD 10.2bnUSD 10.8bnUSD 11.3bnUSD 11.8bnUSD 12.3bnUSD 12.8bnUSD 13.2bnUSD 13.6bnUSD 14.0bn+4.2%
    EBITUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.8bn+4.2%
    NOPATUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.3bn+4.2%
    Add depreciation & amortisationUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bn+4.2%
    Less capital expenditureUSD -3.2bnUSD -3.3bnUSD -3.3bnUSD -3.3bnUSD -3.3bnUSD -3.3bnUSD -3.2bnUSD -3.2bnUSD -3.1bnUSD -3.0bn-0.9%
    Capex, % of revenue33.4%32.1%30.7%29.4%28.1%26.7%25.4%24.0%22.7%21.3%-
    Less increase in working capitalUSD -14.9mUSD -14.3mUSD -14.1mUSD -13.7mUSD -13.2mUSD -12.5mUSD -11.7mUSD -10.8mUSD -9.7mUSD -8.5m-6.0%
    Free cashflow to firmUSD -150.8mUSD -20.8mUSD 123.9mUSD 283.6mUSD 457.2mUSD 643.7mUSD 841.6mUSD 1.0bnUSD 1.3bnUSD 1.5bn-
    Discount factor0.96860.90860.85240.79970.75020.70380.66030.61940.58110.5451-
    Present valueUSD -146.0mUSD -18.9mUSD 105.6mUSD 226.8mUSD 343.0mUSD 453.0mUSD 555.7mUSD 649.9mUSD 734.9mUSD 809.9m-
    Present Value Of The ForecastUSD 3.7bn

    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
    Beta0.705Reported 0.560, pulled toward 1.0 (Blume)
    Cost of equity7.88%Risk-free + beta x equity risk premium
    Cost of debt6.00%Risk-free + 111bp, the spread for a BBB rating at 2.6x interest cover. Book interest / average debt was lower, at 4.5%.
    Market capitalisationUSD 27.2bn58.4% of capital
    Total debtUSD 19.4bn41.6% of capital, book value as a proxy
    Tax rate20.2%Effective, capped at statutory
    WACC6.59%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 7.35

    84% of EV

    Forecast FCFF, final year
    USD 1.5bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (37.9% of NOPAT)
    USD -896.3m
    Capitalised
    USD 1.5bn
    ROIC (WACC floor)
    6.6%
    Terminal value, undiscounted
    USD 36.7bn
    Terminal value, discounted
    USD 20.0bn
    Enterprise value
    USD 23.7bn
    Less net debt
    USD 18.3bn
    Equity value
    USD 5.5bn

    Exit at 12.8x EBITDA

    Value per shareUSD 27.87

    90% of EV

    Terminal value, undiscounted
    USD 64.7bn
    Terminal value, discounted
    USD 35.3bn
    Enterprise value
    USD 39.0bn
    Less net debt
    USD 18.3bn
    Equity value
    USD 20.7bn

    Spread between methods: 116%.

    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%
    4.59%27.5826.6325.6924.7523.80
    5.59%16.2915.5614.8214.0913.36
    6.59%8.537.947.356.776.18
    7.59%2.892.411.931.450.97
    8.59%-1.36-1.76-2.17-2.57-2.97

    Outlined: this model. Green text: above today's price of 36.14. 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 year4.6%4.4%11.5%
    EBIT margin23.5%20.3%34.4%
    Discount rate-6.6%4.2%
    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.