Redrow PLC
LSE:RDW

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Redrow PLC
LSE:RDW
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Price: 779 GBX Market Closed
Market Cap: 2.6B GBX
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DCF Value

This DCF valuation model was created by Alpha Spread and was last updated on Nov 15, 2024.

Estimated DCF Value of one RDW stock is 937.84 GBX. Compared to the current market price of 779 GBX, the stock is Undervalued by 17%.

RDW DCF Value
Base Case
937.84 GBX
Undervaluation 17%
DCF Value
Price
Worst Case
Base Case
Best Case
937.84
DCF Value
Worst Case
Base Case
Best Case
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DCF Value: 937.84 GBX

Present Value Calculation

This block is the starting point of the DCF valuation process. It calculates the present value of a company's forecasted cash flows based on selected operating model. Adjust key parameters like discount rate and terminal growth, and alter inputs such as revenue growth and margins to see their impact on valuation.

DCF Model
Base Case Scenario

The present value of cash flows over the next 5 years amounts to 600.3m GBP. The present value of the terminal value is 2.5B GBP. The total present value equals 3.1B GBP.
Forecast Period
Years
Discount Rate
%
Show All DCF Settings
Terminal Growth
%
Hide DCF Settings
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DCF Value Calculation

This stage translates the present value into DCF value per share. For firm valuation models, it adjusts present value for debt and assets to derive equity value (skipped if using equity valuation model). Finally, this equity value is divided by the number of shares to determine the DCF value per share.

Present Value to DCF Value
Capital Structure

Present Value 3.1B GBP
Equity Value 3.1B GBP
/ Shares Outstanding 330.8m
Value per Share 9.38 GBP
GBP / GBX Exchange Rate 100
RDW DCF Value 937.84 GBX
Undervalued by 17%

You are using the equity valuation model. In this approach, further calculations for converting firm value to equity value are not required. The present value, obtained in the present value calculation block, already represents the equity value.

The DCF value per share is derived by dividing the present value by the number of shares:

Present Value
3.1B GBX
/
Number of Shares
330.8m
=
DCF Value
937.84 GBX

Valuation Analysis

Sensitivity Analysis
DCF Value Sensitivity Analysis

Sensitivity Analysis assesses how changes in key factors like revenue growth, margin, and discount rate affect a stock's DCF value. By visualizing various scenarios, from significant downturns to optimistic growth, this tool helps you understand potential valuation shifts, aiding in risk assessment and strategic decision-making.

DCF Financials
Financials used in DCF Calculation

Revenue
1.5B 3.4B
Net Income
121.9m 377.5m
FCFE
75.3m 284.6m

See Also

Discover More

What is the DCF value of one RDW stock?

Estimated DCF Value of one RDW stock is 937.84 GBX. Compared to the current market price of 779 GBX, the stock is Undervalued by 17%.

The true DCF Value lies somewhere between the worst-case and best-case scenario values. This is because the future is not predetermined, and the stock's DCF Value is based almost entirely on the future of the company. Knowing the full range of possible stock DCF values gives a complete picture of the investment risks and opportunities.

How was the DCF Value calculated?

1. Present Value Calculation. Utilizing the DCF operating model, Redrow PLC's future cash flows are projected and then discounted using a chosen discount rate to determine its Present Value, which is calculated at 3.1B GBP.

2. DCF Value Calculation. The company's capital structure is employed to derive the total Equity Value from the previously calculated Present Value of the cash flow. This Equity Value, when divided by the total number of outstanding shares, yields the DCF Value of 937.84 GBX per share.

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