DCF Studio

    PRN.AX · ASX · Basic Materials

    Perenti Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 2.84

    Market price

    AUD 2.26

    Implied upside

    +25.7%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.

    Value Per Share

    Perpetuity growth
    AUD 2.84+25.7%
    Exit multiple
    AUD 3.00+32.7%
    Market price
    AUD 2.26

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m131m261mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 3.5bnAUD 3.7bnAUD 3.9bnAUD 4.1bnAUD 4.3bn+5.0%
    EBITAUD 250.2mAUD 262.8mAUD 276.1mAUD 290.0mAUD 304.6m+5.0%
    NOPATAUD 175.2mAUD 184.0mAUD 193.3mAUD 203.0mAUD 213.2m+5.0%
    Add depreciation & amortisationAUD 375.4mAUD 394.4mAUD 414.3mAUD 435.2mAUD 457.1m+5.0%
    Less capital expenditureAUD -371.3mAUD -390.0mAUD -409.7mAUD -430.3mAUD -452.0m+5.0%
    Less increase in working capitalAUD 35.1mAUD 36.9mAUD 38.8mAUD 40.7mAUD 42.8m-5.0%
    Free cashflow to firmAUD 214.4mAUD 225.2mAUD 236.6mAUD 248.5mAUD 261.1m+5.0%
    Discount factor0.96220.89090.82490.76380.7072-
    Present valueAUD 206.3mAUD 200.7mAUD 195.2mAUD 189.8mAUD 184.6m-2.7%
    Present Value Of The ForecastAUD 976.7m

    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
    Beta0.544Reported 0.320, pulled toward 1.0 (Blume)
    Cost of equity8.61%Risk-free + beta x equity risk premium
    Cost of debt8.20%Interest expense / average total debt
    Market capitalisationAUD 2.1bn78.7% of capital
    Total debtAUD 571.3m21.3% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC8.00%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 shareAUD 2.84

    66% of EV

    Forecast FCFF, final year
    AUD 261.1m
    Capex at depreciation, working capital in reinvestment
    AUD 213.2m
    Less reinvestment at g/ROIC (31.2% of NOPAT)
    AUD -66.6m
    Capitalised
    AUD 146.6m
    ROIC (WACC floor)
    8.0%
    Terminal value, undiscounted
    AUD 2.7bn
    Terminal value, discounted
    AUD 1.9bn
    Enterprise value
    AUD 2.9bn
    Less net debt
    AUD 248.8m
    Equity value
    AUD 2.7bn

    Exit at 3.9x EBITDA

    Value per shareAUD 3.00

    68% of EV

    Terminal value, undiscounted
    AUD 2.9bn
    Terminal value, discounted
    AUD 2.1bn
    Enterprise value
    AUD 3.1bn
    Less net debt
    AUD 248.8m
    Equity value
    AUD 2.8bn

    Spread between methods: 5%.

    Sensitivity

    Value per share (AUD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.00%3.813.843.873.903.94
    7.00%3.243.253.263.273.28
    8.00%2.822.832.842.852.86
    9.00%2.502.502.512.522.53
    10.00%2.242.242.252.262.27

    Outlined: this model. Green text: above today's price of 2.26. 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 year5.0%1.2%-3.9pp
    EBIT margin7.1%5.7%-1.4pp
    Discount rate8.0%10.0%+2.0pp
    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.