Air New Zealand Limited (AIR)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $2.57 | $2.48 | $2.40 | |
| Terminal Growth% | 0 | $2.64 | $2.55 | $2.46 |
| +1% | $2.71 | $2.62 | $2.53 |
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 $0.81 (overvalued by 46.0%) - 1 day ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 132.28%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 196.06%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 129.92%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $3.76 (undervalued by 198.41%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 131.75%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.92 (undervalued by 131.75%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 134.13%) - over 3 years ago
- kuangxiaohui created a new valuation of $2.95 (undervalued by 134.13%) - over 3 years ago
- GordonGekko created a new valuation of $0.83 (overvalued by 7.78%) - over 3 years ago
- GordonGekko created a new valuation of $1.15 (undervalued by 10.58%) - over 4 years ago
- jmsnz created a new valuation of $1.10 (undervalued by 6.8%) - over 4 years ago
- mattellingsen created a new valuation of $13.75 (undervalued by 1248.04%) - over 4 years ago
- jetjungle created a new valuation of $2.82 (undervalued by 213.33%) - over 4 years ago
- GordonGekko created a new valuation of $1.11 (undervalued by 38.75%) - over 4 years ago
- nzvikram created a new valuation of $2.12 (undervalued by 146.51%) - over 4 years ago
- stevesnz created a new valuation of $0.87 (overvalued by 2.25%) - over 4 years ago
- Warlock created a new valuation of $1.26 (overvalued by 0.79%) - over 4 years ago
- Sam created a new valuation of $1.86 (undervalued by 44.19%) - over 5 years ago
- GordonGekko created a new valuation of $1.24 (overvalued by 3.88%) - over 5 years ago
- KiwiEMH created a new valuation of $1.18 (undervalued by 3.51%) - over 5 years ago
- Julian created a new valuation of $0.46 (overvalued by 58.93%) - over 5 years ago
- GordonGekko created a new valuation of $1.12 (undervalued by 0.0%) - over 5 years ago
- Abo created a new valuation of $0.23 (overvalued by 81.45%) - over 5 years ago
- gmw created a new valuation of $0.17 (overvalued by 80.0%) - over 5 years ago
- jeremy created a new valuation of $2.55 (undervalued by 97.67%) - over 5 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 1,869 |
| Net Debt (Long-term borrowings less cash): | 292 |
| Equity Value: | 1,356 |
| Number of Shares Outstanding: | 1,051,000,000 |
| Calculated value per share: | $2.55 |
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 recent outfitting contracts and strong overseas growth contibute to LTG - however I think the initial VC valuation is a bit generous :)