Discounted Cash Flow (DCF) Analysis Unlevered

Sanderson Farms, Inc. (SAFM)

$204

-5.25 (-2.51%)

All numbers are in Millions, Currency in USD

Stock DCF: -17.62 | 204 | overvalue

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	3,342.23	3,236	3,440.26	3,564.27	4,799.65	5,296.40	5,844.56	6,449.45	7,116.95	7,853.53
Revenue (%)
EBITDA	526.75	143.52	203.42	145.65	767.14	489.16	539.78	595.65	657.30	725.33
EBITDA (%)
EBIT	426.42	32.62	68	-11.10	598.91	295.64	326.24	360.01	397.27	438.38
EBIT (%)
Depreciation	100.34	110.90	135.42	156.75	168.23	193.51	213.54	235.64	260.03	286.94
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	419.28	121.19	95.42	49.06	439.34	313.48	345.93	381.73	421.24	464.83
Total Cash (%)
Account Receivables	138.87	162	138.83	181.52	233.34	245.24	270.62	298.63	329.53	363.64
Account Receivables (%)
Inventories	252.76	240.06	289.93	290.01	350.96	411.61	454.21	501.22	553.09	610.33
Inventories (%)
Accounts Payable	90.90	128.94	132.74	111.46	152.42	178.65	197.14	217.55	240.06	264.91
Accounts Payable (%)
Capital Expenditure	-166.77	-308.87	-249.50	-202.44	-166.35	-327.66	-361.57	-399	-440.29	-485.86
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 204
Beta	0.555
Diluted Shares Outstanding	22.02
Cost of Debt
Tax Rate	23.69
After-tax Cost of Debt	6.83%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.862
Total Debt	28.31
Total Equity	4,492.28
Total Capital	4,520.60
Debt Weighting	0.63
Equity Weighting	99.37
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	3,342.23	3,236	3,440.26	3,564.27	4,799.65	5,296.40	5,844.56	6,449.45	7,116.95	7,853.53
EBITDA	526.75	143.52	203.42	145.65	767.14	489.16	539.78	595.65	657.30	725.33
EBIT	426.42	32.62	68	-11.10	598.91	295.64	326.24	360.01	397.27	438.38
Tax Rate	34.10%	-101.04%	16.53%	273.34%	23.69%	49.33%	49.33%	49.33%	49.33%	49.33%
EBIAT	280.99	65.58	56.76	19.25	457.02	149.81	165.32	182.43	201.31	222.15
Depreciation	100.34	110.90	135.42	156.75	168.23	193.51	213.54	235.64	260.03	286.94
Accounts Receivable	-	-23.13	23.17	-42.69	-51.82	-11.90	-25.38	-28.01	-30.91	-34.11
Inventories	-	12.71	-49.87	-0.08	-60.95	-60.65	-42.60	-47.01	-51.87	-57.24
Accounts Payable	-	38.03	3.81	-21.28	40.96	26.23	18.49	20.40	22.52	24.85
Capital Expenditure	-166.77	-308.88	-249.50	-202.44	-166.35	-327.66	-361.57	-399	-440.29	-485.86
UFCF	214.56	-104.79	-80.22	-90.48	387.09	-30.65	-32.20	-35.54	-39.22	-43.27
WACC
PV UFCF						-28.68	-28.20	-29.12	-30.07	-31.06
SUM PV UFCF										-147.14

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.86
Free cash flow (t + 1)	-44.14
Terminal Value	-908.23
Present Value of Terminal Value	-651.81

Intrinsic Value

Enterprise Value	-798.94
Net Debt	-411.03
Equity Value	-387.91
Shares Outstanding	22.02
Equity Value Per Share	-17.62