As of June 4, 2025, Alimentation Couche-Tard Inc's estimated intrinsic value ranges from $73.09 to $96.47 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $96.47 | +31.8% |
| Discounted Cash Flow (5Y) | $90.75 | +24.0% |
| Dividend Discount Model (Multi-Stage) | $73.09 | -0.1% |
| Dividend Discount Model (Stable) | $77.81 | +6.3% |
| Earnings Power Value | $86.82 | +18.6% |
Is Alimentation Couche-Tard Inc (ATD.TO) undervalued or overvalued?
With the current market price at $73.18, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Alimentation Couche-Tard Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.55 | 0.55 |
| Cost of equity | 5.9% | 7.5% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 20.2% | 21.0% |
| Debt/Equity ratio | 0.29 | 0.29 |
| After-tax WACC | 5.3% | 6.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $66 | $74,831M | 84.7% |
| 10-Year Growth | $70 | $78,772M | 70.1% |
| 5-Year EBITDA | $52 | $61,310M | 81.3% |
| 10-Year EBITDA | $58 | $66,918M | 64.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $4,247M |
| Discount Rate (WACC) | 6.6% - 5.3% |
| Enterprise Value | $64,294M - $79,936M |
| Net Debt | $12,216M |
| Equity Value | $52,079M - $67,720M |
| Outstanding Shares | 948M |
| Fair Value | $55 - $71 |
| Selected Fair Value | $86.82 |
| Metric | Value |
|---|---|
| Market Capitalization | $69379M |
| Enterprise Value | $86164M |
| Trailing P/E | 19.46 |
| Forward P/E | 17.64 |
| Trailing EV/EBITDA | 10.25 |
| Current Dividend Yield | 101.32% |
| Dividend Growth Rate (5Y) | 20.38% |
| Debt-to-Equity Ratio | 0.29 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $28.94 |
| Discounted Cash Flow (5Y) | 25% | $22.69 |
| Dividend Discount Model (Multi-Stage) | 20% | $14.62 |
| Dividend Discount Model (Stable) | 15% | $11.67 |
| Earnings Power Value | 10% | $8.68 |
| Weighted Average | 100% | $86.60 |
Based on our comprehensive valuation analysis, Alimentation Couche-Tard Inc's weighted average intrinsic value is $86.60, which is approximately 18.3% above the current market price of $73.18.
Key investment considerations:
Given these factors, we believe Alimentation Couche-Tard Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.