As of June 6, 2025, Avangrid Inc has a Discounted Cash Flow (DCF) derived fair value of $63.53 per share. With the current market price at $36.02, this represents a potential upside of 76.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $45.90 |
| DCF Fair Value (10-year) | $63.53 |
| Potential Upside (5-year) | 27.4% |
| Potential Upside (10-year) | 76.4% |
| Discount Rate (WACC) | 5.1% - 6.1% |
Revenue is projected to grow from $8309 million in 12-2023 to $12148 million by 12-2033, representing a compound annual growth rate of approximately 3.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 8309 | 5% |
| 12-2024 | 8831 | 6% |
| 12-2025 | 9143 | 4% |
| 12-2026 | 9488 | 4% |
| 12-2027 | 10097 | 6% |
| 12-2028 | 10299 | 2% |
| 12-2029 | 10533 | 2% |
| 12-2030 | 11120 | 6% |
| 12-2031 | 11342 | 2% |
| 12-2032 | 11569 | 2% |
| 12-2033 | 12148 | 5% |
Net profit margin is expected to improve from 8% in 12-2023 to 8% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | 665 | 8% |
| 12-2024 | 675 | 8% |
| 12-2025 | 699 | 8% |
| 12-2026 | 725 | 8% |
| 12-2027 | 772 | 8% |
| 12-2028 | 787 | 8% |
| 12-2029 | 805 | 8% |
| 12-2030 | 850 | 8% |
| 12-2031 | 867 | 8% |
| 12-2032 | 884 | 8% |
| 12-2033 | 929 | 8% |
with a 5-year average of $2798 million. Projected CapEx is expected to maintain at approximately 39% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 2947 |
| 12-2025 | 3113 |
| 12-2026 | 3267 |
| 12-2027 | 3561 |
| 12-2028 | 3780 |
| 12-2029 | 3915 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 72 |
| Days Inventory | 74 |
| Days Payables | 6 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2024 | 1018 | 6 | 872 | 35 | 106 |
| 2025 | 4278 | 23 | 3611 | 146 | 499 |
| 2026 | 4477 | 24 | 3747 | 40 | 665 |
| 2027 | 4848 | 25 | 3988 | 165 | 670 |
| 2028 | 5093 | 26 | 4068 | 62 | 937 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 45.90 | 27.4% |
| 10-Year DCF (Growth) | 63.53 | 76.4% |
| 5-Year DCF (EBITDA) | 27.11 | -24.7% |
| 10-Year DCF (EBITDA) | 32.11 | -10.9% |
Is Avangrid Inc (AGR) a buy or a sell? Avangrid Inc is definitely a buy. Based on our DCF analysis, Avangrid Inc (AGR) appears to be significantly undervalued with upside potential of 76.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $36.02.