DCF Studio

    TOU.TO · TOR · Energy

    Tourmaline Oil Corp.

    Also onConsensus Drift

    Implied value per share

    CAD 34.99

    Market price

    CAD 60.85

    Implied upside

    -42.5%

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

    AdjustedCapital expenditure runs at 35.9% of revenue against depreciation of 27.4%. 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: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 34.99-42.5%
    Exit multiple
    CAD 35.93-40.9%
    Market price
    CAD 60.85

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CAD). Outflows negative.

    0m352m704mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCAD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCAD 5.7bnCAD 5.1bnCAD 4.6bnCAD 4.1bnCAD 3.7bn-10.1%
    EBITCAD 1.5bnCAD 1.4bnCAD 1.2bnCAD 1.1bnCAD 1.0bn-10.1%
    NOPATCAD 1.2bnCAD 1.1bnCAD 949.0mCAD 853.1mCAD 766.9m-10.1%
    Add depreciation & amortisationCAD 1.6bnCAD 1.4bnCAD 1.3bnCAD 1.1bnCAD 1.0bn-10.1%
    Less capital expenditureCAD -2.0bnCAD -1.8bnCAD -1.6bnCAD -1.5bnCAD -1.3bn-10.1%
    Less increase in working capitalCAD 10.1mCAD 9.1mCAD 8.2mCAD 7.4mCAD 6.6m+10.1%
    Free cashflow to firmCAD 704.1mCAD 632.9mCAD 568.9mCAD 511.4mCAD 459.7m-10.1%
    Discount factor0.97210.91860.86810.82030.7752-
    Present valueCAD 684.5mCAD 581.4mCAD 493.9mCAD 419.5mCAD 356.4m-15.1%
    Present Value Of The ForecastCAD 2.5bn

    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
    Beta0.494Reported 0.245, pulled toward 1.0 (Blume)
    Cost of equity6.02%Risk-free + beta x equity risk premium
    Cost of debt4.41%Interest expense / average total debt
    Market capitalisationCAD 23.6bn92.6% of capital
    Total debtCAD 1.9bn7.4% of capital, book value as a proxy
    Tax rate23.7%Effective, capped at statutory
    WACC5.82%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 34.99

    83% of EV

    Forecast FCFF, final year
    CAD 459.7m
    Capex at depreciation, working capital in reinvestment
    CAD 766.9m
    Less reinvestment at g/ROIC (30.3% of NOPAT)
    CAD -232.3m
    Capitalised
    CAD 534.5m
    ROIC (reported)
    8.3%
    Terminal value, undiscounted
    CAD 16.5bn
    Terminal value, discounted
    CAD 12.8bn
    Enterprise value
    CAD 15.3bn
    Less net debt
    CAD 1.9bn
    Equity value
    CAD 13.4bn

    Exit at 8.4x EBITDA

    Value per shareCAD 35.93

    84% of EV

    Terminal value, undiscounted
    CAD 17.0bn
    Terminal value, discounted
    CAD 13.2bn
    Enterprise value
    CAD 15.7bn
    Less net debt
    CAD 1.9bn
    Equity value
    CAD 13.8bn

    Spread between methods: 3%.

    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%
    3.82%62.3373.5593.20136.64315.01
    4.82%42.2246.0851.5559.9874.71
    5.82%31.4432.9934.9937.6541.43
    6.82%24.7125.3326.0827.0128.18
    7.82%20.1220.3120.5320.7721.05

    Outlined: this model. Green text: above today's price of 60.85. 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-10.1%0.1%+10.2pp
    EBIT margin27.2%43.0%+15.9pp
    Discount rate5.8%4.5%-1.3pp
    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.