TGM's two-stage DCF values Walgreens Boots Alliance, Inc. (WBA) between $9.81 and $26.57 depending on assumptions, with a base case of $16.40. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (8%) reflects its beta.
What would today's price require?
$11.98 is justified only if free cash flow grows about -0.9% a year (fading to 2.5% long-run) at a 8% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 9.0% | $9.81 |
| Base case | 3.5%/yr | 8.0% | $16.40 |
| Optimistic | 6.5%/yr | 7.0% | $26.57 |
Current Price
$11.98
Market-Implied Growth
-0.9%/yr
vs +3.5% 5Y actual
Model Scenario Range
$9.81 – $26.57
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for WBA (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.2B · 0.87B shares · net debt $8.2B
Estimated Fair Value
$16.40
+36.9% vs $11.98
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 3.5%/yr FCF growth and 10-year horizon fixed. Green = above today's $11.98; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.0% | $23.29 | $26.79 | $31.28 | $37.27 | $45.64 |
| 7.0% | $17.28 | $19.49 | $22.19 | $25.56 | $29.88 |
| 8.0% | $13.11 | $14.62 | $16.40 | $18.53 | $21.13 |
| 9.0% | $10.06 | $11.15 | $12.39 | $13.84 | $15.56 |
| 10.0% | $7.73 | $8.54 | $9.46 | $10.50 | $11.70 |
