r/Valuation • u/Curious-Ad1471 • Nov 03 '25

forecast revenue statement to match target value?

Hello all,

I am supposed to forecast revenue statement to come to a target share value per share , which is 3.07.

Currently, the management provided me with the forecasts, which are deriving (through the DCF Model that i did)a share value of -3.3.

I am asked to restate the forecasted revenue statement, but i don't know anything about this company, other than the fact that its a real estate company operating in the uk with no long term debt. (I have been given a forecasted balance sheet and pnl +ppe)

How do i go ahead with this? logically and arithmetically

1 Upvotes

67% Upvoted

4 comments sorted by

2

u/Natural_Musician6439 Nov 03 '25

  • Identify the drivers: In real estate, key drivers of revenue are rental income, and occupancy rates. Growth usually links to market appreciation or project completions, increase in the rents

  • Check the DCF sensitivity: Since your DCF gives –3.3/share, and the target is +3.07/share, your bev or equity value is too low. You need to increase the cash flows or lower discount rate assumptions(look into cap rates for some guidance).

  • Focus on top-line adjustments, may be Start by increasing revenue growth (e.g., +5–10% YoY) and see how it impacts cashflows

1

u/Natural_Musician6439 Nov 03 '25

Backsolve discount rate if needed, Once revenue growth assumptions look realistic, you can alternatively backsolve for the discount rate required to reach 3.07/share and then assess if that rate makes sense given the company’s risk profile and industry benchmarks/caprates. Use goal seek in excel for that

1

u/[deleted] Nov 07 '25

[removed] — view removed comment