FBU.NZ
Fletcher Building Limited OrdinClosedFBU.NZ discounted cash flow valuation
FBU.NZ Fair Value
Reverse DCF: today's price implies -6.6% a year of FCF growth for years 1–5, against 20.4% in this model.
Model: 20.4% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 7.09% (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 | NZD 7.46B |
|---|---|
| PV of terminal value (72% of EV) | NZD 19.18B |
| Enterprise value | NZD 26.64B |
| + Cash & investments | NZD 145.00M |
| − Total debt | −NZD 2.02B |
| Equity value | NZD 24.76B |
| ÷ Shares outstanding | 1.07B |
| Value per share | NZD 23.10 |
| Market cap | NZD 3.59B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.68 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 8.63% |
| Pre-tax cost of debt | 5.22% |
| Tax rate | 16.5% |
| Debt / (equity + debt) | 36.0% |
| WACC | 7.09% |
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% |
|---|---|---|---|---|---|
| 5.09% | 32.59 | 37.51 | 44.34 | 54.43 | 70.87 |
| 6.09% | 24.48 | 27.23 | 30.74 | 35.39 | 41.83 |
| 7.09% | 19.30 | 21.01 | 23.10 | 25.69 | 29.01 |
| 8.09% | 15.71 | 16.86 | 18.21 | 19.83 | 21.80 |
| 9.09% | 13.09 | 13.90 | 14.83 | 15.92 | 17.20 |
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 (FY2026) | — | NZD 427.00M | — | — |
| Year 1 | 20.4% | NZD 514.11M | 0.934 | NZD 480.07M |
| Year 2 | 20.4% | NZD 618.99M | 0.872 | NZD 539.74M |
| Year 3 | 20.4% | NZD 745.26M | 0.814 | NZD 606.82M |
| Year 4 | 20.4% | NZD 897.29M | 0.760 | NZD 682.24M |
| Year 5 | 20.4% | NZD 1.08B | 0.710 | NZD 767.04M |
| Year 6 | 16.8% | NZD 1.26B | 0.663 | NZD 836.73M |
| Year 7 | 13.2% | NZD 1.43B | 0.619 | NZD 884.78M |
| Year 8 | 9.7% | NZD 1.57B | 0.578 | NZD 906.01M |
| Year 9 | 6.1% | NZD 1.66B | 0.540 | NZD 897.47M |
| Year 10 | 2.5% | NZD 1.70B | 0.504 | NZD 859.00M |
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.