DCF Studio

    SAP.TO · TOR · Consumer Defensive

    Saputo Inc.

    Also onConsensus Drift

    Implied value per share

    CAD 38.60

    Market price

    CAD 39.82

    Implied upside

    -3.1%

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

    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 38.60-3.1%
    Exit multiple
    CAD 34.40-13.6%
    Market price
    CAD 39.82

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CAD). Outflows negative.

    0m393m785mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayCAD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueCAD 17.5bnCAD 17.4bnCAD 17.3bnCAD 17.2bnCAD 17.1bn-0.5%
    EBITCAD 936.3mCAD 931.2mCAD 926.1mCAD 921.0mCAD 915.9m-0.5%
    NOPATCAD 688.2mCAD 684.4mCAD 680.7mCAD 676.9mCAD 673.2m-0.5%
    Add depreciation & amortisationCAD 588.9mCAD 585.7mCAD 582.5mCAD 579.3mCAD 576.1m-0.5%
    Less capital expenditureCAD -500.2mCAD -497.4mCAD -494.7mCAD -492.0mCAD -489.3m-0.5%
    Less increase in working capitalCAD 8.4mCAD 8.4mCAD 8.3mCAD 8.3mCAD 8.2m+0.5%
    Free cashflow to firmCAD 785.4mCAD 781.0mCAD 776.8mCAD 772.5mCAD 768.3m-0.5%
    Discount factor0.97560.92870.88400.84140.8009-
    Present valueCAD 766.2mCAD 725.3mCAD 686.6mCAD 650.0mCAD 615.3m-5.3%
    Present Value Of The ForecastCAD 3.4bn

    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
    Beta0.418Reported 0.132, pulled toward 1.0 (Blume)
    Cost of equity5.60%Risk-free + beta x equity risk premium
    Cost of debt3.30%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationCAD 15.8bn82.8% of capital
    Total debtCAD 3.3bn17.2% of capital, book value as a proxy
    Tax rate26.5%Effective, capped at statutory
    WACC5.06%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 shareCAD 38.60

    82% of EV

    Forecast FCFF, final year
    CAD 768.3m
    Capex at depreciation, working capital in reinvestment
    CAD 762.3m
    Less reinvestment at g/ROIC (37.4% of NOPAT)
    CAD -285.1m
    Capitalised
    CAD 477.2m
    ROIC (reported)
    6.7%
    Terminal value, undiscounted
    CAD 19.1bn
    Terminal value, discounted
    CAD 15.3bn
    Enterprise value
    CAD 18.8bn
    Less net debt
    CAD 2.8bn
    Equity value
    CAD 15.9bn

    Exit at 11.4x EBITDA

    Value per shareCAD 34.40

    80% of EV

    Terminal value, undiscounted
    CAD 17.0bn
    Terminal value, discounted
    CAD 13.6bn
    Enterprise value
    CAD 17.0bn
    Less net debt
    CAD 2.8bn
    Equity value
    CAD 14.2bn

    Spread between methods: 12%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.06%83.42110.95187.721616.29—
    4.06%49.2255.3465.3284.63138.41
    5.06%34.2236.0738.6042.3148.33
    6.06%25.7926.2726.8727.6228.63
    7.06%20.6720.7620.8620.9521.05

    Outlined: this model. Green text: above today's price of 39.82. 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-0.5%0.1%+0.6pp
    EBIT margin5.4%5.5%+0.2pp
    Discount rate5.1%5.0%-0.1pp
    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.