RUS.TO
RUSSEL METALSAfter hoursRUS.TO discounted cash flow valuation
RUS.TO Fair Value
Reverse DCF: today's price implies 15.9% a year of FCF growth for years 1–5, against 1.0% in this model.
Model: 1.0% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 9.44% (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 1.16B |
|---|---|
| PV of terminal value (51% of EV) | CAD 1.20B |
| Enterprise value | CAD 2.36B |
| + Cash & investments | CAD 154.00M |
| − Total debt | −CAD 482.00M |
| Equity value | CAD 2.03B |
| ÷ Shares outstanding | 54.91M |
| Value per share | CAD 37.02 |
| Market cap | CAD 5.04B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.95 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 9.96% |
| Pre-tax cost of debt | 5.22% |
| Tax rate | 24.1% |
| Debt / (equity + debt) | 8.7% |
| WACC | 9.44% |
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% |
|---|---|---|---|---|---|
| 7.44% | 46.59 | 50.02 | 54.14 | 59.19 | 65.51 |
| 8.44% | 39.05 | 41.40 | 44.14 | 47.38 | 51.28 |
| 9.44% | 33.41 | 35.09 | 37.02 | 39.24 | 41.84 |
| 10.44% | 29.03 | 30.28 | 31.68 | 33.28 | 35.10 |
| 11.44% | 25.53 | 26.48 | 27.54 | 28.73 | 30.06 |
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 173.90M | — | — |
| Year 1 | 1.0% | CAD 175.64M | 0.914 | CAD 160.49M |
| Year 2 | 1.0% | CAD 177.40M | 0.835 | CAD 148.11M |
| Year 3 | 1.0% | CAD 179.17M | 0.763 | CAD 136.69M |
| Year 4 | 1.0% | CAD 180.96M | 0.697 | CAD 126.15M |
| Year 5 | 1.0% | CAD 182.77M | 0.637 | CAD 116.42M |
| Year 6 | 1.3% | CAD 185.15M | 0.582 | CAD 107.76M |
| Year 7 | 1.6% | CAD 188.11M | 0.532 | CAD 100.04M |
| Year 8 | 1.9% | CAD 191.68M | 0.486 | CAD 93.15M |
| Year 9 | 2.2% | CAD 195.90M | 0.444 | CAD 86.99M |
| Year 10 | 2.5% | CAD 200.80M | 0.406 | CAD 81.47M |
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.