DCF Studio

    WDS.AX · ASX · Energy

    Woodside Energy Group Ltd

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 31.09

    Market price

    AUD 32.42

    Implied upside

    -4.1%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.
    AdjustedBeta of -0.234 is not usable in a cost of equity. Clamped to 0.30.
    AdjustedCapital expenditure runs at 38.8% of revenue against depreciation of 30.9%. 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.

    Value Per Share

    Perpetuity growth
    AUD 31.09-4.1%
    Exit multiple
    AUD 26.98-16.8%
    Market price
    AUD 32.42

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 11.9bnUSD 10.9bnUSD 10.0bnUSD 9.2bnUSD 8.4bn-8.3%
    EBITUSD 5.5bnUSD 5.1bnUSD 4.6bnUSD 4.3bnUSD 3.9bn-8.3%
    NOPATUSD 3.9bnUSD 3.6bnUSD 3.3bnUSD 3.0bnUSD 2.8bn-8.3%
    Add depreciation & amortisationUSD 3.7bnUSD 3.4bnUSD 3.1bnUSD 2.8bnUSD 2.6bn-8.3%
    Less capital expenditureUSD -4.6bnUSD -4.2bnUSD -3.9bnUSD -3.6bnUSD -3.3bn-8.3%
    Less increase in working capitalUSD -345.4mUSD -316.9mUSD -290.7mUSD -266.7mUSD -244.6m-8.3%
    Free cashflow to firmUSD 2.7bnUSD 2.4bnUSD 2.2bnUSD 2.1bnUSD 1.9bn-8.3%
    Discount factor0.96880.90930.85350.80110.7519-
    Present valueUSD 2.6bnUSD 2.2bnUSD 1.9bnUSD 1.6bnUSD 1.4bn-13.9%
    Present Value Of The ForecastUSD 9.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.300Clamped from a reported -0.234
    Cost of equity7.15%Risk-free + beta x equity risk premium
    Cost of debt5.35%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 61.6bn81.8% of capital
    Total debtUSD 13.7bn18.2% of capital, book value as a proxy
    Tax rate28.6%Effective, capped at statutory
    WACC6.54%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 22.14

    81% of EV

    Forecast FCFF, final year
    USD 1.9bn
    Capex at depreciation, working capital in reinvestment
    USD 2.8bn
    Less reinvestment at g/ROIC (24.2% of NOPAT)
    USD -674.4m
    Capitalised
    USD 2.1bn
    ROIC (reported)
    10.3%
    Terminal value, undiscounted
    USD 53.7bn
    Terminal value, discounted
    USD 40.4bn
    Enterprise value
    USD 50.1bn
    Less net debt
    USD 7.8bn
    Equity value
    USD 42.4bn

    Exit at 7.1x EBITDA

    Value per shareUSD 19.22

    78% of EV

    Terminal value, undiscounted
    USD 46.3bn
    Terminal value, discounted
    USD 34.8bn
    Enterprise value
    USD 44.6bn
    Less net debt
    USD 7.8bn
    Equity value
    USD 36.8bn

    Spread between methods: 14%.

    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%
    4.54%35.3539.9446.7557.9479.82
    5.54%25.7227.7430.4034.0839.55
    6.54%19.9220.9122.1423.6925.74
    7.54%16.0416.5517.1517.8718.76
    8.54%13.2713.5313.8214.1514.54

    Outlined: this model. Green text: above today's price of 23.09. 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-8.3%-7.6%+0.7pp
    EBIT margin46.3%47.9%+1.5pp
    Discount rate6.5%6.4%-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.