DCF Studio

    TSCO · NMS · Consumer Cyclical

    Tractor Supply Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 38.90

    Market price

    USD 35.31

    Implied upside

    +10.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 5.4% of revenue against depreciation of 2.8%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 38.90+10.2%
    Exit multiple
    USD 36.05+2.1%
    Market price
    USD 35.31

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 16.1bnUSD 16.7bnUSD 17.3bnUSD 17.9bnUSD 18.5bnUSD 19.1bnUSD 19.7bnUSD 20.2bnUSD 20.8bnUSD 21.3bn+3.2%
    EBITUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+3.2%
    NOPATUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bn+3.2%
    Add depreciation & amortisationUSD 453.9mUSD 471.5mUSD 489.0mUSD 506.3mUSD 523.3mUSD 540.0mUSD 556.3mUSD 572.1mUSD 587.4mUSD 602.1m+3.2%
    Less capital expenditureUSD -869.7mUSD -867.8mUSD -863.1mUSD -855.4mUSD -844.7mUSD -830.9mUSD -814.0mUSD -794.0mUSD -770.9mUSD -744.7m-1.7%
    Capex, % of revenue5.4%5.2%5.0%4.8%4.6%4.3%4.1%3.9%3.7%3.5%-
    Less increase in working capitalUSD -149.8mUSD -172.9mUSD -171.6mUSD -169.7mUSD -167.1mUSD -163.9mUSD -159.9mUSD -155.3mUSD -150.1mUSD -144.1m-0.4%
    Free cashflow to firmUSD 690.0mUSD 735.1mUSD 806.9mUSD 881.6mUSD 959.0mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bn+8.0%
    Discount factor0.96760.90590.84810.79400.74340.69600.65160.61000.57110.5347-
    Present valueUSD 667.7mUSD 665.9mUSD 684.3mUSD 700.0mUSD 712.9mUSD 723.1mUSD 730.5mUSD 735.3mUSD 737.5mUSD 737.2m-
    Present Value Of The ForecastUSD 7.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.654Reported 0.484, pulled toward 1.0 (Blume)
    Cost of equity7.66%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 21.2x interest cover. Book interest / average debt was lower, at 1.2%.
    Market capitalisationUSD 18.4bn75.6% of capital
    Total debtUSD 5.9bn24.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.81%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 38.90

    73% of EV

    Forecast FCFF, final year
    USD 1.4bn
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (8.6% of NOPAT)
    USD -142.6m
    Capitalised
    USD 1.5bn
    ROIC (reported)
    29.2%
    Terminal value, undiscounted
    USD 36.2bn
    Terminal value, discounted
    USD 19.4bn
    Enterprise value
    USD 26.4bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 20.7bn

    Exit at 12.3x EBITDA

    Value per shareUSD 36.05

    72% of EV

    Terminal value, undiscounted
    USD 33.4bn
    Terminal value, discounted
    USD 17.8bn
    Enterprise value
    USD 24.9bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 19.2bn

    Spread between methods: 8%.

    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%
    4.81%62.4871.7485.07105.84142.56
    5.81%44.3848.9654.9763.1574.94
    6.81%33.1835.7338.9042.9448.23
    7.81%25.5827.1028.9431.1833.97
    8.81%20.1021.0522.1723.5125.12

    Outlined: this model. Green text: above today's price of 35.31. 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.

    InputActualModelImplied
    Revenue growth, a year3.0%3.2%2.2%
    EBIT margin10.2%9.9%9.3%
    Discount rate-6.8%7.1%
    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.