Deterra Royalties Analysis

Moderately undervalued. Our base-case DCF implies a fair value of A$4.54 per share (~19% upside), supported by ultra-high EBITDA margins (~93%), negligible capex requirements, and a long-life royalty book. The primary risk is iron ore price cyclicality, partially mitigated by emerging diversification into gold and lithium. The fully-franked 8.9% gross dividend yield provides a strong margin of safety for income investors.