DCF Studio

    RRL.AX · ASX · Basic Materials

    Regis Resources Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 8.82

    Market price

    AUD 7.80

    Implied upside

    +13.1%

    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 8.82+13.1%
    Exit multiple
    AUD 12.33+58.0%
    Market price
    AUD 7.80

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m439m878mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 3.0bnAUD 3.8bnAUD 4.9bnAUD 6.2bnAUD 7.9bn+27.5%
    EBITAUD 392.7mAUD 500.7mAUD 638.3mAUD 813.8mAUD 1.0bn+27.5%
    NOPATAUD 275.5mAUD 351.2mAUD 447.8mAUD 570.8mAUD 727.7m+27.5%
    Add depreciation & amortisationAUD 746.7mAUD 952.0mAUD 1.2bnAUD 1.5bnAUD 2.0bn+27.5%
    Less capital expenditureAUD -715.8mAUD -912.6mAUD -1.2bnAUD -1.5bnAUD -1.9bn+27.5%
    Less increase in working capitalAUD 26.0mAUD 33.2mAUD 42.3mAUD 53.9mAUD 68.7m-27.5%
    Free cashflow to firmAUD 332.4mAUD 423.8mAUD 540.2mAUD 688.7mAUD 878.1m+27.5%
    Discount factor0.94060.83210.73610.65130.5761-
    Present valueAUD 312.7mAUD 352.6mAUD 397.7mAUD 448.5mAUD 505.9m+12.8%
    Present Value Of The ForecastAUD 2.0bn

    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
    Beta1.299Reported 1.447, pulled toward 1.0 (Blume)
    Cost of equity13.14%Risk-free + beta x equity risk premium
    Cost of debt9.50%Interest expense / average total debt
    Market capitalisationAUD 5.9bn98.3% of capital
    Total debtAUD 101.7m1.7% of capital, book value as a proxy
    Tax rate29.9%Effective, capped at statutory
    WACC13.04%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 8.82

    64% of EV

    Forecast FCFF, final year
    AUD 878.1m
    Capex at depreciation, working capital in reinvestment
    AUD 727.7m
    Less reinvestment at g/ROIC (10.3% of NOPAT)
    AUD -74.9m
    Capitalised
    AUD 652.9m
    ROIC (reported)
    24.3%
    Terminal value, undiscounted
    AUD 6.4bn
    Terminal value, discounted
    AUD 3.7bn
    Enterprise value
    AUD 5.7bn
    Less net debt
    AUD -1.0bn
    Equity value
    AUD 6.7bn

    Exit at 3.7x EBITDA

    Value per shareAUD 12.33

    76% of EV

    Terminal value, undiscounted
    AUD 11.0bn
    Terminal value, discounted
    AUD 6.3bn
    Enterprise value
    AUD 8.3bn
    Less net debt
    AUD -1.0bn
    Equity value
    AUD 9.4bn

    Spread between methods: 33%.

    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%
    11.04%10.1110.3310.5710.8511.16
    12.04%9.269.429.609.8010.03
    13.04%8.568.688.828.979.13
    14.04%7.978.078.178.288.40
    15.04%7.477.547.627.717.80

    Outlined: this model. Green text: above today's price of 7.80. 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 year27.5%23.4%-4.1pp
    EBIT margin13.1%11.2%-1.9pp
    Discount rate13.0%14.7%+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.