As of May 29, 2025, BlackRock Floating Rate Income Strategies Fund Inc has a Discounted Cash Flow (DCF) derived fair value of $9.07 per share. With the current market price at $12.65, this represents a potential upside of -28.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $7.39 |
| DCF Fair Value (10-year) | $9.07 |
| Potential Upside (5-year) | -41.6% |
| Potential Upside (10-year) | -28.3% |
| Discount Rate (WACC) | 7.6% - 10.2% |
Revenue is projected to grow from $57 million in 12-2023 to $96 million by 12-2033, representing a compound annual growth rate of approximately 5.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 57 | 44% |
| 12-2024 | 60 | 5% |
| 12-2025 | 63 | 5% |
| 12-2026 | 68 | 9% |
| 12-2027 | 74 | 8% |
| 12-2028 | 77 | 5% |
| 12-2029 | 83 | 7% |
| 12-2030 | 88 | 6% |
| 12-2031 | 90 | 2% |
| 12-2032 | 93 | 3% |
| 12-2033 | 96 | 3% |
Net profit margin is expected to improve from 110% in 12-2023 to 81% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | 63 | 110% |
| 12-2024 | 48 | 81% |
| 12-2025 | 50 | 81% |
| 12-2026 | 55 | 81% |
| 12-2027 | 59 | 81% |
| 12-2028 | 62 | 81% |
| 12-2029 | 67 | 81% |
| 12-2030 | 71 | 81% |
| 12-2031 | 72 | 81% |
| 12-2032 | 75 | 81% |
| 12-2033 | 77 | 81% |
with a 5-year average of $0 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 0 |
| 12-2025 | 0 |
| 12-2026 | 0 |
| 12-2027 | 0 |
| 12-2028 | 0 |
| 12-2029 | 0 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 82 |
| Days Inventory | 0 |
| Days Payables | 570 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2024 | 46 | 18 | 0 | (7) | 35 |
| 2025 | 48 | 19 | 0 | 9 | 21 |
| 2026 | 52 | 20 | 0 | (4) | 36 |
| 2027 | 56 | 22 | 0 | (1) | 36 |
| 2028 | 59 | 23 | 0 | 2 | 34 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 7.39 | -41.6% |
| 10-Year DCF (Growth) | 9.07 | -28.3% |
| 5-Year DCF (EBITDA) | 18.39 | 45.3% |
| 10-Year DCF (EBITDA) | 18.35 | 45.1% |
Is BlackRock Floating Rate Income Strategies Fund Inc (FRA) a buy or a sell? BlackRock Floating Rate Income Strategies Fund Inc is definitely a sell. Based on our DCF analysis, BlackRock Floating Rate Income Strategies Fund Inc (FRA) appears to be overvalued with upside potential of -28.3%. 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 reducing exposure at the current market price of $12.65.