DCF Studio

    TAP · NYQ · Consumer Defensive

    Molson Coors Beverage Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 96.96

    Market price

    USD 37.53

    Implied upside

    +158.4%

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

    Value Per Share

    Perpetuity growth
    USD 96.96+158.4%
    Exit multiple
    USD 48.43+29.0%
    Market price
    USD 37.53

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 11.3bnUSD 11.4bnUSD 11.6bnUSD 11.8bnUSD 11.9bn+1.4%
    EBITUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bn+1.4%
    NOPATUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bn+1.4%
    Add depreciation & amortisationUSD 718.3mUSD 728.0mUSD 737.8mUSD 747.8mUSD 757.9m+1.4%
    Less capital expenditureUSD -681.7mUSD -690.9mUSD -700.2mUSD -709.7mUSD -719.3m+1.4%
    Less increase in working capitalUSD 45.4mUSD 46.0mUSD 46.7mUSD 47.3mUSD 47.9m-1.4%
    Free cashflow to firmUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bn+1.4%
    Discount factor0.97010.91290.85910.80850.7609-
    Present valueUSD 1.2bnUSD 1.2bnUSD 1.1bnUSD 1.1bnUSD 1.0bn-4.6%
    Present Value Of The ForecastUSD 5.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.611Reported 0.420, pulled toward 1.0 (Blume)
    Cost of equity8.36%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 7.0bn52.4% of capital
    Total debtUSD 6.4bn47.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.26%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 96.96

    77% of EV

    Forecast FCFF, final year
    USD 1.3bn
    Capex at depreciation, working capital in reinvestment
    USD 1.4bn
    Less reinvestment at g/ROIC (35.9% of NOPAT)
    USD -516.9m
    Capitalised
    USD 922.1m
    ROIC (reported)
    7.0%
    Terminal value, undiscounted
    USD 25.1bn
    Terminal value, discounted
    USD 19.1bn
    Enterprise value
    USD 24.8bn
    Less net debt
    USD 5.5bn
    Equity value
    USD 19.3bn

    Exit at 5.3x EBITDA

    Value per shareUSD 48.43

    63% of EV

    Terminal value, undiscounted
    USD 12.4bn
    Terminal value, discounted
    USD 9.5bn
    Enterprise value
    USD 15.1bn
    Less net debt
    USD 5.5bn
    Equity value
    USD 9.6bn

    Spread between methods: 67%.

    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%
    4.26%175.00194.83225.66280.61407.17
    5.26%123.06129.49138.08150.30169.23
    6.26%92.9094.7496.9699.75103.40
    7.26%74.0074.3674.7275.0975.45
    8.26%61.8262.1362.4362.7463.05

    Outlined: this model. Green text: above today's price of 37.53. 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 year1.4%-10.4%-11.8pp
    EBIT margin13.4%6.2%-7.2pp
    Discount rate6.3%11.5%+5.2pp
    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.