DCF Studio

    STJ.L · LSE · Financial Services

    St. James's Place plc

    Also onConsensus Drift

    Implied value per share

    GBp 4777.62

    Market price

    GBp 1096.50

    Implied upside

    +335.7%

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

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    AdjustedConsensus rests on as few as 1 analyst estimate(s).
    AdjustedReported capital expenditure averages just 0.05% 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.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.2%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: GBP assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    GBp 4777.62+335.7%
    Exit multiple
    GBp 2127.03+94.0%
    Market price
    GBp 1096.50

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (GBP). Outflows negative.

    0m332m663mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayGBP
    LineFY26FY27FY28FY29FY30CAGR
    RevenueGBP 38.1bnGBP 48.1bnGBP 60.8bnGBP 76.8bnGBP 97.0bn+26.3%
    EBITGBP 1.4bnGBP 1.7bnGBP 2.2bnGBP 2.8bnGBP 3.5bn+26.3%
    NOPATGBP 1.0bnGBP 1.3bnGBP 1.6bnGBP 2.1bnGBP 2.6bn+26.3%
    Add depreciation & amortisationGBP 64.5mGBP 81.4mGBP 102.9mGBP 130.0mGBP 164.2m+26.3%
    Less capital expenditureGBP -380.7mGBP -481.0mGBP -607.6mGBP -767.6mGBP -969.7m+26.3%
    Less increase in working capitalGBP -451.4mGBP -570.3mGBP -720.4mGBP -910.1mGBP -1.1bn+26.3%
    Free cashflow to firmGBP 260.4mGBP 328.9mGBP 415.5mGBP 524.9mGBP 663.1m+26.3%
    Discount factor0.95520.87160.79530.72570.6622-
    Present valueGBP 248.7mGBP 286.7mGBP 330.5mGBP 381.0mGBP 439.1m+15.3%
    Present Value Of The ForecastGBP 1.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.50%GBP assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.007Reported 1.011, pulled toward 1.0 (Blume)
    Cost of equity10.04%Risk-free + beta x equity risk premium
    Cost of debt5.42%Interest expense / average total debt
    Market capitalisationGBP 5.4bn92.5% of capital
    Total debtGBP 442.3m7.5% of capital, book value as a proxy
    Tax rate25.0%Effective, capped at statutory
    WACC9.59%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 shareGBP 47.78

    93% of EV

    Forecast FCFF, final year
    GBP 663.1m
    Capex at depreciation, working capital in reinvestment
    GBP 2.7bn
    Less reinvestment at g/ROIC (5.7% of NOPAT)
    GBP -152.0m
    Capitalised
    GBP 2.5bn
    ROIC (reported)
    43.9%
    Terminal value, undiscounted
    GBP 36.4bn
    Terminal value, discounted
    GBP 24.1bn
    Enterprise value
    GBP 25.8bn
    Less net debt
    GBP 112.7m
    Equity value
    GBP 25.7bn

    Exit at 4.1x EBITDA

    Value per shareGBP 21.27

    85% of EV

    Terminal value, undiscounted
    GBP 14.9bn
    Terminal value, discounted
    GBP 9.9bn
    Enterprise value
    GBP 11.6bn
    Less net debt
    GBP 112.7m
    Equity value
    GBP 11.4bn

    Spread between methods: 77%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.59%60.6265.3370.9677.8086.31
    8.59%50.4153.6557.4261.8567.15
    9.59%42.7945.1247.7850.8354.38
    10.59%36.9138.6440.5842.7745.27
    11.59%32.2433.5635.0236.6538.48

    Outlined: this model. Green text: above today's price of 10.96. 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 year26.3%-13.0%-39.3pp
    EBIT margin3.6%1.2%-2.4pp
    Discount rate9.6%23.4%+13.8pp
    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.