Brookfield Property Partners L.P. (BPY) Discounted Future Market Cap

Brookfield Property Partners L.P.

BPY (NASDAQ)

(%)

Valuation
Brookfield Property Partners L.P. Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("quote:close") / data.get("income:eps"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Calculate a linear regression for forecasting revenues
data.compute({
    "linearRegressionRevenue": f"function:linear_regression:income:revenue start:{-assumptions.get('historical_years')}",
}, forecast=assumptions.get("projection_years"))

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"function:compound:{data.get('linearRegressionRevenue:1')} rate:{assumptions.get('%revenue_growth_rate')} offset:-1",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("quote:close"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income",
        "linearRegressionRevenue": "Linear Regression Revenue"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ],
        "hidden_keys": ["linearRegressionRevenue"]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	-9.37 USD
Estimated net income	618.4 Mil. USD
Estimated market capitalization	-4.94 Bil. USD
Market capitalization discounted to present	-3.01 Bil. USD
Shares Outstanding	321.2 Mil.
Earnings Per Share (EPS)	-2.33 USD
Market Price	18.59 USD
Price to Earnings (PE) Ratio	-118.3

Historical and forecasted data

Monetary values are in USD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "dates": [2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029], "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [4853000000, 5352000000, 6135000000, 7239000000, 9117000000, 7247000000, 7716000000, 8071000000, null, null, {"y": 10027440476, "oy": 10027440476, "e": true, "c": 2025, "g": 15.79, "og": 15.79}, {"y": 10909754963, "oy": 10909754963, "e": true, "c": 2026, "g": 8.8, "og": 8.8}, {"y": 11869704302, "oy": 11869704302, "e": true, "c": 2027, "g": 8.8, "og": 8.8}, {"y": 12914119584, "oy": 12914119584, "e": true, "c": 2028, "g": 8.8, "og": 8.8}, {"y": 14050432966, "oy": 14050432966, "e": true, "c": 2029, "g": 8.8, "og": 8.8}], "dataType": ".", "displayAs": "line", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [1065000000, 660000000, 136000000, 764000000, 884000000, -1098000000, 530000000, -47000000, null, null, {"y": 441307655, "oy": 441307655, "e": true, "c": 2025, "g": -161.6, "og": -161.6}, {"y": 480138315, "oy": 480138315, "e": true, "c": 2026, "g": 8.8, "og": 8.8}, {"y": 522385686, "oy": 522385686, "e": true, "c": 2027, "g": 8.8, "og": 8.8}, {"y": 568350402, "oy": 568350402, "e": true, "c": 2028, "g": 8.8, "og": 8.8}, {"y": 618359554, "oy": 618359554, "e": true, "c": 2029, "g": 8.8, "og": 8.8}], "dataType": ".", "displayAs": "line", "hidden": false}, {"label": "Linear Regression Revenue", "mappingKey": "linearRegressionRevenue", "data": [5317916666, 5788869047, 6259821428, 6730773809, 7201726190, 7672678571, 8143630952, 8614583333, 9085535714, 9556488095, 10027440476, 10498392857, 10969345238, 11440297619, 11911249999], "dataType": ".", "displayAs": "line", "hidden": true}], "editableDates": {"2025": 36, "2026": 37, "2027": 38, "2028": 39, "2029": 40}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2025	2026	2027	2028	2029

↳ Growth Rate

Estimated Future Values

amounts of USD except for #	LTM	2025	2026	2027	2028	2029
Revenue	8,660	10,027	10,910	11,870	12,914	14,050
Revenue Growth Rate			8.8%	8.8%	8.8%	8.8%
Net Income	-716	441.3	480.1	522.4	568.4	618.4

Historical Values

amounts of USD except for #	Average	LTM	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	7,154	8,660	8,071	7,716	7,247	9,117	7,239	6,135	5,352	4,853
Cost of Revenue	2,766	0	0	0	2,633	3,268	3,113	2,834	2,431	2,318
Gross Profit	5,310	8,660	8,071	7,716	4,614	5,849	4,126	3,301	2,921	2,535
Gross Margin	71.72%	100%	100%	100%	63.67%	64.15%	57%	53.81%	54.58%	52.24%
Operating Income	837.7	-4,082	-2,449	-1,573	2,825	3,712	2,786	2,412	2,112	1,796
Operating Margin	15.12%	-47.14%	-30.34%	-20.39%	38.98%	40.72%	38.49%	39.32%	39.46%	37.01%
Net Income	242	-716	-47	530	-1,098	884	764	136	660	1,065
Net Margin	4.4%	-8.27%	-0.582%	6.87%	-15.15%	9.7%	10.55%	2.22%	12.33%	21.95%

Historical Growth Rates

amounts of USD except for #	Average	LTM	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	7,154	8,660	8,071	7,716	7,247	9,117	7,239	6,135	5,352	4,853
Revenue Growth Rate	8.8%		4.6%	6.47%	-20.51%	25.94%	18%	14.63%	10.28%	10.98%
Net Income	242	-716	-47	530	-1,098	884	764	136	660	1,065
Net Margin	4.4%	-8.27%	-0.582%	6.87%	-15.15%	9.7%	10.55%	2.22%	12.33%	21.95%
Net Income Growth Rate	-16.14%		-108.9%	-148.3%	-224.2%	15.71%	461.8%	-79.39%	-38.03%	-7.79%
Stockholders Equity	20,648	5,922	5,794	6,318	9,048	11,796	46,740	35,124	34,161	30,933
Equity Growth Rate	-10.11%		-8.29%	-30.17%	-23.3%	-74.76%	33.07%	2.82%	10.44%	9.31%
Return on Invested Capital (ROIC)	1.46%	-5.09%	-2.39%	-1.92%	5.13%	4.82%	2.5%	3.15%	3.92%	2.97%
After-tax Operating Income	872.8	-4,905	-1,910	-1,380	3,163	3,495	2,726	2,238	2,679	1,750
Income Tax Rate	-0.764%	-20.17%	22%	12.28%	-11.97%	5.85%	2.17%	7.22%	-26.84%	2.59%
Invested Capital	76,635	96,361	79,898	72,032	61,687	72,526	108,926	71,027	68,395	58,867