CM.TO
CANADIAN IMPERIAL BANK OF COMMEClosedCM.TO discounted cash flow valuation
CANADIAN IMPERIAL BANK OF COMME is a banks - diversified company. Its cash flows include lending and deposits, so free cash flow isn't owner earnings and this model can mislead. Compare it with peers on book value and earnings instead.
CM.TO Fair Value
Reverse DCF: today's price implies -5.9% a year of FCF growth for years 1–5, against 5.8% in this model.
Model: 5.8% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 9.53% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | CAD 104.72B |
|---|---|
| PV of terminal value (54% of EV) | CAD 120.53B |
| Enterprise value | CAD 225.25B |
| + Cash & investments | CAD 323.62B |
| − Total debt | −CAD 296.07B |
| Equity value | CAD 252.79B |
| ÷ Shares outstanding | 907.94M |
| Value per share | CAD 278.43 |
| Market cap | CAD 143.85B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 1.24 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 11.41% |
| Pre-tax cost of debt | 11.14% |
| Tax rate | 22.7% |
| Debt / (equity + debt) | 67.3% |
| WACC | 9.53% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 7.53% | 335.53 | 355.94 | 380.40 | 410.25 | 447.49 |
| 8.53% | 290.53 | 304.56 | 320.92 | 340.23 | 363.37 |
| 9.53% | 256.81 | 266.90 | 278.43 | 291.71 | 307.20 |
| 10.53% | 230.61 | 238.13 | 246.57 | 256.13 | 267.05 |
| 11.53% | 209.69 | 215.43 | 221.81 | 228.93 | 236.93 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (TTM) | — | CAD 12.85B | — | — |
| Year 1 | 5.8% | CAD 13.60B | 0.913 | CAD 12.41B |
| Year 2 | 5.8% | CAD 14.38B | 0.834 | CAD 11.99B |
| Year 3 | 5.8% | CAD 15.22B | 0.761 | CAD 11.58B |
| Year 4 | 5.8% | CAD 16.10B | 0.695 | CAD 11.19B |
| Year 5 | 5.8% | CAD 17.03B | 0.634 | CAD 10.81B |
| Year 6 | 5.1% | CAD 17.91B | 0.579 | CAD 10.37B |
| Year 7 | 4.5% | CAD 18.71B | 0.529 | CAD 9.89B |
| Year 8 | 3.8% | CAD 19.43B | 0.483 | CAD 9.38B |
| Year 9 | 3.2% | CAD 20.04B | 0.441 | CAD 8.83B |
| Year 10 | 2.5% | CAD 20.54B | 0.402 | CAD 8.27B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.