Below are the data sources, inputs and calculation used to determine the intrinsic value for

Tassal Group.

Data Point Source Value

2 Stage Free Cash Flow to
Valuation Model Equity
Average of 6 Analyst Estimates (S&P
Levered Free Cash Flow Global) See below
Discount Rate (Cost of
Equity) See below 8.6%
Perpetual Growth Rate 10-Year AU Government Bond Rate 2.8%

ASX:TGR Discounted Cash Flow Data Sources

An important part of a discounted cash flow is the discount rate, below we explain how it has
been calculated.

Data Point Calculation/ Source Result

Risk-Free Rate 10-Year AU Govt Bond Rate 2.8%
Equity Risk Premium S&P Global 7.2%
Food Unlevered Beta Simply Wall St/ S&P Global 0.48
= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) 
Re-levered Beta = 0.477 (1 + (1- 30%) (17.52%)) 0.535
Levered Beta limited to 0.8 to 2.0
Levered Beta (practical range for a stable firm) 0.8
= Cost of Equity = Risk Free Rate + (Levered Beta * Equity
Discount Rate/ Cost of Risk Premium) 
Equity = 2.77% + (0.8 * 7.23%) 8.55%

Calculation of Discount Rate/ Cost of Equity for ASX:TGR

Discounted Cash Flow Calculation for ASX:TGR using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Tassal Group is arrived at by
discounting future cash flows to their present value using the 2 stage method. We use analyst's
estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the
company grows at a stable rate into perpetuity.

2019 2020 2021 2022 2023

Levered FCF (AUD, Millions) 36.90 51.10 59.30 71.40 75.10
Analyst Analyst Analyst Analyst Analyst
Source x1 x1 x1 x1 x1
Present Value 33.99 43.36 46.36 51.42 49.82
Discounted (@ 8.55%)
Present value of next 5 years cash
flows A$224.95

ASX:TGR DCF 1st Stage: Next 5 year cash flow forecast

Calculation Result
= FCF2023 × (1 + g) ÷ (Discount Rate – g) 
= A$75.10 × (1 + 2.77%) ÷ (8.55% –
Terminal Value 2.77%) A$1,335.17
= Terminal Value ÷ (1 + r)5 
Present Value of Terminal Value = A$1,335.17 ÷ (1 + 8.55%)5 A$885.71

ASX:TGR DCF 2nd Stage: Terminal Value

Calculation Result
= Present value of next 5 years cash flows + Terminal
Value 
Total Equity Value = A$224.95 + A$885.71 A$1,110.65
Equity Value per
Share = Total value / Shares Outstanding 
(AUD) = A$1,110.65 / 177.26 A$6.27

ASX:TGR Total Equity Value

Calculation Result
Value per share (AUD) From above. A$6.27
Discount to share price of
A$4.33 
Current discount = -1 x (A$4.33 - A$6.27) / A$6.27 30.9%

ASX:TGR Discount to Share Price

Learn more about our DCF calculations in Simply Wall St’s analysis model .