DCF Studio

    WHC.AX · ASX · Energy

    Whitehaven Coal Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 21.12

    Market price

    AUD 7.93

    Implied upside

    +166.4%

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

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedBeta of -0.300 is not usable in a cost of equity. Clamped to 0.30.

    Value Per Share

    Perpetuity growth
    AUD 21.12+166.4%
    Exit multiple
    AUD 12.76+61.0%
    Market price
    AUD 7.93

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0bn1bn1bnFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 5.2bnAUD 5.0bnAUD 4.8bnAUD 4.6bnAUD 4.5bn-3.8%
    EBITAUD 1.9bnAUD 1.9bnAUD 1.8bnAUD 1.7bnAUD 1.7bn-3.8%
    NOPATAUD 1.4bnAUD 1.3bnAUD 1.3bnAUD 1.2bnAUD 1.2bn-3.8%
    Add depreciation & amortisationAUD 456.0mAUD 438.7mAUD 422.1mAUD 406.1mAUD 390.7m-3.8%
    Less capital expenditureAUD -382.4mAUD -367.9mAUD -353.9mAUD -340.5mAUD -327.6m-3.8%
    Less increase in working capitalAUD -23.3mAUD -22.4mAUD -21.5mAUD -20.7mAUD -19.9m-3.8%
    Free cashflow to firmAUD 1.4bnAUD 1.4bnAUD 1.3bnAUD 1.3bnAUD 1.2bn-3.8%
    Discount factor0.96350.89460.83050.77110.7159-
    Present valueAUD 1.4bnAUD 1.2bnAUD 1.1bnAUD 970.2mAUD 866.6m-10.7%
    Present Value Of The ForecastAUD 5.5bn

    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 -0.300
    Cost of equity7.15%Risk-free + beta x equity risk premium
    Cost of debt13.27%Interest expense / average total debt
    Market capitalisationAUD 6.5bn73.7% of capital
    Total debtAUD 2.3bn26.3% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC7.71%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 shareAUD 21.12

    71% of EV

    Forecast FCFF, final year
    AUD 1.2bn
    Capex at depreciation, working capital in reinvestment
    AUD 1.2bn
    Less reinvestment at g/ROIC (18.4% of NOPAT)
    AUD -214.8m
    Capitalised
    AUD 952.6m
    ROIC (reported)
    13.6%
    Terminal value, undiscounted
    AUD 18.7bn
    Terminal value, discounted
    AUD 13.4bn
    Enterprise value
    AUD 18.9bn
    Less net debt
    AUD 1.5bn
    Equity value
    AUD 17.4bn

    Exit at 4.4x EBITDA

    Value per shareAUD 12.76

    54% of EV

    Terminal value, undiscounted
    AUD 9.1bn
    Terminal value, discounted
    AUD 6.5bn
    Enterprise value
    AUD 12.0bn
    Less net debt
    AUD 1.5bn
    Equity value
    AUD 10.5bn

    Spread between methods: 49%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.71%28.8231.0333.9137.8443.54
    6.71%23.3224.5326.0127.8830.32
    7.71%19.5920.2921.1222.1323.36
    8.71%16.8817.3117.8018.3719.05
    9.71%14.8315.0915.3915.7316.11

    Outlined: this model. Green text: above today's price of 7.93. 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-3.8%-20.8%-17.1pp
    EBIT margin37.5%15.7%-21.7pp
    Discount rate7.7%17.0%+9.3pp
    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.