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American Funds Retirement Income Portfolio - Moderate Class F-1

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Asset Management - IncomeSector: Financial Services

Fair Value Summary

Current Price$14.02
5Y Range-34.56 – -24.45
5Y Selected-29.50
(-) Safety Margin85.80%
5Y Buy Price$-4.19
Upside (to Buy Price)-129.88%
10Y Range-34.58 – -25.19
10Y Selected-29.88
(-) Safety Margin85.80%
10Y Buy Price$-4.24
Upside (to Buy Price)-130.26%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9795
Revenue R2 (10Y)0.1857
Net Income R2 (5Y)0.0002
Net Income R2 (10Y)0.0051
EBITDA R2 (5Y)0.2903
EBITDA R2 (10Y)0.0993
FCF R2 (5Y)0.3881
FCF R2 (10Y)0.1583
Safety Score0.1420

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth0.00%0.44%0.89%1.33%1.78%2.22%2.67%3.11%3.56%4.00%
Revenue184,992.00185,814.19187,465.87189,965.41193,342.58197,639.08202,909.45209,222.19216,661.20225,327.65
EBITDA747.96751.28757.96768.07781.72799.09820.40845.92876.00911.04
D&A-8,817.05-8,856.23-8,934.96-9,054.09-9,215.05-9,419.83-9,671.02-9,971.90-10,326.46-10,739.51
EBIT-8,069.09-8,104.95-8,177.00-8,286.02-8,433.33-8,620.74-8,850.62-9,125.98-9,450.46-9,828.47
Pro forma Taxes831.11834.80842.22853.45868.63887.93911.61939.97973.391,012.32
NOPAT-7,237.98-7,270.15-7,334.77-7,432.57-7,564.70-7,732.81-7,939.02-8,186.01-8,477.07-8,816.15
Capital Expenditures-8,602.60-8,640.84-8,717.64-8,833.88-8,990.93-9,190.72-9,435.81-9,729.37-10,075.30-10,478.31
NWC Investment0.0045.6691.73138.82187.56238.61292.70350.59413.14481.31
(+) D&A8,817.058,856.238,934.969,054.099,215.059,419.839,671.029,971.9010,326.4610,739.51
Free Cash Flow-7,023.54-7,009.09-7,025.73-7,073.54-7,153.02-7,265.09-7,411.10-7,592.89-7,812.77-8,073.64
Diluted Shares Outstanding3,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.003,995,500,000.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start6/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point9/30/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.09%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF-6,962.64-6,733.89-6,186.98-5,709.63-5,292.29-4,926.95-4,606.84-4,326.24-4,080.30-3,864.91
Raw: -104,247.93
-73,843.62
Raw: -117,664.98
-53,927.31

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-104,729.05-106,617.98
(-) Net Debt8,838.008,838.00
Equity Value-113,567.05-115,455.98
(/) Shares Out3,995.503,995.50
Fair Value$-28.42$-28.90
(-) Safety Margin85.80%85.80%
Buy Price$-4.04$-4.10
Current Price$14.02$14.02
Upside (to Buy Price)-128.79%-129.27%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.59%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF-6,956.29-6,705.68-6,105.11-5,582.90-5,127.82-4,730.47-4,382.96-4,078.61-3,811.80-3,577.79
Raw: -85,441.87
-58,374.64
Raw: -96,438.51
-40,729.29

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-88,852.44-91,788.72
(-) Net Debt8,838.008,838.00
Equity Value-97,690.44-100,626.72
(/) Shares Out3,995.503,995.50
Fair Value$-24.45$-25.19
(-) Safety Margin85.80%85.80%
Buy Price$-3.47$-3.58
Current Price$14.02$14.02
Upside (to Buy Price)-124.76%-125.51%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.59%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF-6,969.06-6,762.47-6,270.72-5,840.44-5,463.62-5,133.51-4,844.38-4,591.40-4,370.44-4,178.03
Raw: -133,302.26
-97,930.86
Raw: -150,458.69
-74,887.80

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-129,237.17-129,311.87
(-) Net Debt8,838.008,838.00
Equity Value-138,075.17-138,149.87
(/) Shares Out3,995.503,995.50
Fair Value$-34.56$-34.58
(-) Safety Margin85.80%85.80%
Buy Price$-4.91$-4.91
Current Price$14.02$14.02
Upside (to Buy Price)-135.00%-135.02%

Reverse DCF: Market Implied Growth

Current Price$14.02
WACC Used9.1%
IMPLIED REVENUE GROWTH86.38%
Metric2027202820292030203120322033203420352036
Implied Revenue345,263.31643,491.231,199,319.352,235,254.864,165,999.907,764,463.6814,471,170.8226,970,927.2650,267,592.4693,687,207.24
Constant Implied Growth86.38%86.38%86.38%86.38%86.38%86.38%86.38%86.38%86.38%86.38%
Implied Free Cash Flow34.5364.35119.93223.53416.60776.451,447.122,697.095,026.769,368.72
Discount Factor0.940.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF32.4851.9488.73151.59258.96442.40755.771,291.122,205.673,768.05

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
Error: Rolling DCF Data Not Available
Debug Info: Read Error

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$-29.72
Median
$-29.08
10th Percentile
$-35.02
90th Percentile
$-25.19

Fair Value Distribution

$-56.30 - $-54.57
1
$-54.57 - $-52.84
0
$-52.84 - $-51.11
0
$-51.11 - $-49.38
1
$-49.38 - $-47.65
0
$-47.65 - $-45.92
0
$-45.92 - $-44.20
2
$-44.20 - $-42.47
5
$-42.47 - $-40.74
2
$-40.74 - $-39.01
10
$-39.01 - $-37.28
24
$-37.28 - $-35.55
44
$-35.55 - $-33.82
64
$-33.82 - $-32.09
92
$-32.09 - $-30.36
141
$-30.36 - $-28.63
162
$-28.63 - $-26.90
186
$-26.90 - $-25.17
168
$-25.17 - $-23.44
71
$-23.44 - $-21.71
27