Lion Nathan Limited (LNN)

Discount cash flow analysis

Within margin of safety Undervalued by 0.0%

5% margin of safety What's this?

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How does this work?

This is an interactive analyst report for Lion Nathan Limited, based on a discounted cash flow valuation approach.

You can modify the assumptions and the valuation will be updated automatically. You can also save and share your valuation.

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Values in $ millions
2008 2009 2010 2011 2012 2013 2014 2015
 
                 
               
 

What will the revenues be in the future?

Growth beyond year three is driven by the terminal growth rate.

Sensitivity matrix

   
-1%
Discount Rate %
0%

1%
  -1% $7.23 $7.08 $6.94
Terminal Growth% 0 $7.28 $7.13 $6.98
  +1% $7.32 $7.18 $7.03

How does a change in discount rate or terminal growth affect valuation?

This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate

Valuations and comments

  • GordonGekko created a new valuation of $9.44 (overvalued by 17.98%) - 8 years ago
  • GordonGekko created a new valuation of $10.55 (overvalued by 8.34%) - 8 years ago
  • GordonGekko created a new valuation of $10.55 (overvalued by 8.34%) - 8 years ago
  • cfatwo created a new valuation of $11.11 (overvalued by 5.12%) - over 8 years ago
  • cfatwo created a new valuation of $8.82 (overvalued by 24.68%) - over 8 years ago
  • cfatwo created a new valuation of $8.82 (overvalued by 24.68%) - over 8 years ago
  • cfatwo created a new valuation of $11.05 (overvalued by 5.64%) - over 8 years ago
  • cfatwo created a new valuation of $9.87 (overvalued by 15.71%) - over 8 years ago
  • cfatwo created a new valuation of $5.72 (overvalued by 51.15%) - over 8 years ago
  • cfatwo created a new valuation of $6.04 (overvalued by 48.42%) - over 8 years ago
  • cfatwo created a new valuation of $7.13 (overvalued by 39.11%) - over 8 years ago
  • cfatwo created a new valuation of $6.24 (overvalued by 46.71%) - over 8 years ago
  • GordonGekko created a new valuation of $7.13 (overvalued by 9.86%) - over 8 years ago
  • coolieee created a new valuation of $7.13 (overvalued by 11.76%) - over 8 years ago
  • gordonsk created a new valuation of $7.13 (overvalued by 6.68%) - over 8 years ago
  • GordonGekko created a new valuation of $7.13 (overvalued by 13.05%) - over 8 years ago
  • KiwiEMH created a new valuation of $7.13 (overvalued by 10.88%) - almost 9 years ago
  • KiwiEMH created a new valuation of $9.09 (overvalued by 1.41%) - over 9 years ago
  • GordonGekko created a new valuation of $8.96 (undervalued by 4.55%) - over 9 years ago
  • Sam created a new valuation of $8.96 (undervalued by 4.55%) - over 9 years ago

Comments

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The boring details

All amounts in millions Figures
Enterprise Value: 0
Net Debt (Long-term borrowings less cash): 1,505
Equity Value: 4,766
Number of Shares Outstanding: 532,000,000
Calculated value per share: $7.13

Enterprise Value is the present value of the post-tax cash flows for a business into the future.


Calcuation of EV

Where:

  • C1, C2, C3 - the cash flow in period 1, 2, 3, ...
  • r - the discount rate

To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.


Perpetuity

Where:

  • Cn - the cash flow in the final forecast period.
  • LTG - the long-term growth rate
  • r - the discount rate
  • g - the terminal growth rate

The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.


CAPM model

Where:

  • rt - the risk free rate
  • t - the tax rate
  • B - the beta of the company
  • MRP - the Market Risk Premium

Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.