Post by
zhcdn1 on Aug 26, 2023 10:51pm
Price Target - $3.50
From the standard growing perpetuity formula:
PV = Cash Flow / (Discount Rate - Growth Rate)
Cash Flow = Approx 0.28 per share
Discount Rate = 10%
Growth Rate = 2%
Effective yield on Single B credit bonds is approx 8.50% so 10% seems reasonable.
Growth rate in perpetuity of 2% is what the Company cites in their annual report assumptions for impairment testing. Potentially conservative given inflationary backdrop.
If Air Miles stabalizes and grows back to where it has been historically, this would seemingly represent upside as well.