Discounted Cash Flow (DCF) Analysis Unlevered

Hormel Foods Corporation (HRL)

$46.87

-0.18 (-0.38%)
All numbers are in Millions, Currency in USD
Stock DCF: 102.20 | 46.87 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 9,167.529,545.709,497.329,608.4611,386.1912,049.1612,750.7313,493.1514,278.8015,110.20
Revenue (%)
EBITDA 1,421.941,369.191,392.651,341.601,397.581,705.071,804.351,909.412,020.592,138.24
EBITDA (%)
EBIT 1,290.961,207.341,227.441,135.821,169.171,487.911,574.541,666.221,763.241,865.91
EBIT (%)
Depreciation 130.98161.86165.21205.78228.41217.16229.81243.19257.35272.33
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 444.12459.14687.641,731.65634.69975.771,032.581,092.701,156.331,223.66
Total Cash (%)
Account Receivables 640.70604.43594.32702.42904.01839.31888.18939.89994.621,052.53
Account Receivables (%)
Inventories 921.02963.531,042.361,072.761,369.201,308.671,384.871,465.511,550.841,641.14
Inventories (%)
Accounts Payable 552.71618.83587.23644.61793.31780.09825.51873.57924.44978.27
Accounts Payable (%)
Capital Expenditure -221.29-389.61-293.84-367.50-232.42-372.44-394.13-417.08-441.36-467.06
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 46.87
Beta 0.111
Diluted Shares Outstanding 547.58
Cost of Debt
Tax Rate 19.30
After-tax Cost of Debt 1.05%
Risk-Free Rate
Market Risk Premium
Cost of Equity 4.221
Total Debt 3,323.90
Total Equity 25,665.07
Total Capital 28,988.98
Debt Weighting 11.47
Equity Weighting 88.53
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 9,167.529,545.709,497.329,608.4611,386.1912,049.1612,750.7313,493.1514,278.8015,110.20
EBITDA 1,421.941,369.191,392.651,341.601,397.581,705.071,804.351,909.412,020.592,138.24
EBIT 1,290.961,207.341,227.441,135.821,169.171,487.911,574.541,666.221,763.241,865.91
Tax Rate 33.78%14.32%19.09%18.51%19.30%21.00%21.00%21.00%21.00%21.00%
EBIAT 854.891,034.46993.15925.52943.541,175.451,243.901,316.321,392.971,474.07
Depreciation 130.98161.86165.21205.78228.41217.16229.81243.19257.35272.33
Accounts Receivable -36.2610.11-108.10-201.5964.70-48.87-51.71-54.73-57.91
Inventories --42.50-78.83-30.40-296.4460.52-76.20-80.64-85.33-90.30
Accounts Payable -66.12-31.6057.38148.70-13.2245.4248.0750.8653.83
Capital Expenditure -221.29-389.61-293.84-367.50-232.42-372.44-394.13-417.08-441.36-467.06
UFCF 764.58866.59764.20682.68590.211,132.18999.931,058.151,119.761,184.96
WACC
PV UFCF 1,090.10926.98944.50962.35980.53
SUM PV UFCF 4,904.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 3.86
Free cash flow (t + 1) 1,208.66
Terminal Value 64,981.56
Present Value of Terminal Value 53,771.05

Intrinsic Value

Enterprise Value 58,675.51
Net Debt 2,710.37
Equity Value 55,965.14
Shares Outstanding 547.58
Equity Value Per Share 102.20