DCF Studio

    XOM · NYQ · Energy

    ExxonMobil Holdings Corporation

    Also onConsensus Drift

    Implied value per share

    USD 85.99

    Market price

    USD 163.54

    Implied upside

    -47.4%

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

    Value Per Share

    Perpetuity growth
    USD 85.99-47.4%
    Exit multiple
    USD 107.66-34.2%
    Market price
    USD 163.54

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn15bn29bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 302.2bnUSD 282.0bnUSD 263.2bnUSD 245.6bnUSD 229.1bn-6.7%
    EBITUSD 38.9bnUSD 36.3bnUSD 33.9bnUSD 31.6bnUSD 29.5bn-6.7%
    NOPATUSD 30.7bnUSD 28.7bnUSD 26.8bnUSD 25.0bnUSD 23.3bn-6.7%
    Add depreciation & amortisationUSD 20.5bnUSD 19.1bnUSD 17.8bnUSD 16.7bnUSD 15.5bn-6.7%
    Less capital expenditureUSD -20.5bnUSD -19.1bnUSD -17.8bnUSD -16.6bnUSD -15.5bn-6.7%
    Less increase in working capitalUSD -1.4bnUSD -1.3bnUSD -1.3bnUSD -1.2bnUSD -1.1bn-6.7%
    Free cashflow to firmUSD 29.3bnUSD 27.4bnUSD 25.5bnUSD 23.8bnUSD 22.2bn-6.7%
    Discount factor0.96560.90040.83960.78290.7300-
    Present valueUSD 28.3bnUSD 24.7bnUSD 21.4bnUSD 18.7bnUSD 16.2bn-13.0%
    Present Value Of The ForecastUSD 109.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.447Reported 0.175, pulled toward 1.0 (Blume)
    Cost of equity7.46%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 672.5bn93.9% of capital
    Total debtUSD 43.5bn6.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.24%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 85.99

    73% of EV

    Forecast FCFF, final year
    USD 22.2bn
    Capex at depreciation, working capital in reinvestment
    USD 23.3bn
    Less reinvestment at g/ROIC (20.1% of NOPAT)
    USD -4.7bn
    Capitalised
    USD 18.6bn
    ROIC (reported)
    12.4%
    Terminal value, undiscounted
    USD 402.4bn
    Terminal value, discounted
    USD 293.7bn
    Enterprise value
    USD 403.0bn
    Less net debt
    USD 32.9bn
    Equity value
    USD 370.2bn

    Exit at 11.8x EBITDA

    Value per shareUSD 107.66

    78% of EV

    Terminal value, undiscounted
    USD 530.2bn
    Terminal value, discounted
    USD 387.0bn
    Enterprise value
    USD 496.3bn
    Less net debt
    USD 32.9bn
    Equity value
    USD 463.5bn

    Spread between methods: 22%.

    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%
    5.24%121.41132.35147.23168.65202.26
    6.24%95.86101.44108.47117.61130.02
    7.24%79.1882.2785.9990.5496.27
    8.24%67.4269.2171.2973.7476.67
    9.24%58.6759.7360.9162.2763.84

    Outlined: this model. Green text: above today's price of 163.54. 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-6.7%6.3%+13.0pp
    EBIT margin12.9%23.4%+10.5pp
    Discount rate7.2%5.0%-2.3pp
    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.