Contact Energy Limited (CEN)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $9.55 | $9.00 | $8.51 | |
| Terminal Growth% | 0 | $10.05 | $9.45 | $8.91 |
| +1% | $10.60 | $9.94 | $9.35 |
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
- Valuecruncher created a new valuation of $2.01 (overvalued by 59.06%) - over 4 years ago
- sambling created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- sambling created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- sambling created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- sambling created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- sambling created a new valuation of $6.47 (undervalued by 13.31%) - over 11 years ago
- DarrylLundy created a new valuation of $6.54 (overvalued by 1.06%) - over 11 years ago
- DarrylLundy created a new valuation of $0.00 (overvalued by 100.0%) - over 11 years ago
- DarrylLundy created a new valuation of $5.59 (overvalued by 15.43%) - over 11 years ago
- GordonGekko created a new valuation of $6.35 (undervalued by 0.95%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $5.55 (overvalued by 4.8%) - over 11 years ago
- GordonGekko created a new valuation of $6.04 (undervalued by 2.55%) - over 11 years ago
- GordonGekko created a new valuation of $5.95 (undervalued by 6.25%) - almost 12 years ago
- KiwiEMH created a new valuation of $6.44 (overvalued by 8.78%) - 12 years ago
- Bert created a new valuation of $12.36 (undervalued by 30.38%) - over 12 years ago
- Sam created a new valuation of $11.07 (undervalued by 18.02%) - over 12 years ago
- tiger created a new valuation of $9.45 (undervalued by 1.61%) - over 12 years ago
- GordonGekko created a new valuation of $7.73 (overvalued by 16.88%) - over 12 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 3,363 |
| Net Debt (Long-term borrowings less cash): | 532 |
| Equity Value: | 5,363 |
| Number of Shares Outstanding: | 576,000,000 |
| Calculated value per share: | $9.45 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
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.
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.
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.
The current market price seems about right to me. It all seems to swing on the terminal cap ex. amount. I'm picking that the capital program over the short-term will be less than the Valuecruncher valuation suggests, but that the terminal cap ex will be greater.