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STZ Valuation Bremer_020513

STZ Valuation Bremer_020513 - Constellation Brand WACC...

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Constellation Brand WACC Analysis Assumptions Ticker Company Total Debt Tax Rate 35% ENXTBR: ABI Anheuser-Busch InBev SA/NV 0.56 29095.4 104442.10 28% 0.474 Risk Free Rate 3.05% NYSE: BEAM Beam, Inc 1.35 2514.4 9595.32 26% 1.154 Mkt Risk Premium 6.15% NYSE: BF.B Brown-Forman Corp. 0.69 512 13681.08 4% 0.674 STZ Weight of Debt 36.79% NYSE: DPS Dr. Pepper Snapple Group, Inc 0.71 2766 9451.90 29% 0.597 STZ Cost of Debt 3.23% NsadaqGS: MNST Monster Beverage Corp 0.28 0 8158.64 0% 0.280 STZ Tax Rate 35% NYSE: TAP Molson Coors Brewing Company 0.75 4,696.70 8128.63 58% 0.545 NYSE: STZ Constellation Brands Inc. 1.12 4051.3 7674.48 53% 0.834 Average 0.816667 0.713 Average Unlevered Beta for Comps 0.713 D/E 53% Tax Rate 35% STZ Levered Beta 0.957 WACC Mkt Risk Premium 6.15% STZ Inputs (CapIQ) Multiplied by Bottom up Beta 0.957 Company Name Constellation Brands Inc Adj: MRP 5.89% Ticker STZ Add: RFR 3.05% Total Debt 4051.3 Cost of Equity 8.94% Total Preferred 0 Multiplied by STZ Weight of Equity 63.21% Cost of Equity Portion 5.65% Market Cap 6,962.10 Cash and Equivalents 204.3 Cost of Debt 3.23% Shares Outstanding 183.6 Tax Rate 35% A-T Cost of Debt 2.10% Multiplied by STZ Weight of Debt 36.79% A-T Cost of Debt Portion 0.77% Current Price $41.80 WACC 6.42% Levered Beta Mkt. Value Equity Debt/ Equity Unlevered Beta
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Constellation Brands DCF 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue 3773 3654.6 3364.8 3332 2654.3 2680.8 4155.3 4737.0 5305.5 5836.0 6186.2 6495.5 6755.3 6890.4 7028.3 7098.5 Revenue Growth -3.1% -7.9% -1.0% -20.3% 1.0% 55% 14% 12% 10% 6% 5% 4% 2% 2% 1% Net Fixed Assets 2035 1547.5 1567.2 1219.6 1255.8 1215.9 2077.7 2139.7 2381.5 2716.4 2869.8 3026.8 3101.9 3174.3 3254.4 3283.5 Net Fixed Assets / Revenues 53.9% 42.3% 46.6% 36.6% 47.3% 45.4% 50.0% 45.2% 44.9% 46.5% 46.4% 46.6% 45.9% 46.1% 46.3% 46.3% EBIT 521.8 557.7 571.6 536 550.9 536.2 831.1 947.4 1061.1 1167.2 1237.2 1364.1 1418.6 1447.0 1475.9 1490.7 EBIT Margin 13.8% 15.3% 17.0% 16.1% 20.8% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 21% 21% 21% 21% 21% Taxes -203.502 -1015.014 352.70292 -8.04 91.816299 107.23 290.87 331.59 371.38 408.52 433.03 477.42 496.52 506.45 516.58 521.74 Tax Rate -39.0% -182.0% 61.7% -1.50% 16.7% 20% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% Depreciation 159.5 150.4 149.6 124.7 103.8 110.9 189.5 195.1 217.2 247.7 261.7 276.0 282.9 289.4 296.8 299.4 Depr Rate as % of Net Fixed Assets 7.8% 9.7% 9.5% 10.2% 8.3% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% CAPX 1293.9 101.1 259.1 150.1 147.1 70.9 1051.2 257.1 459.0 582.5 415.2 433.0 358.0 361.8 376.8 328.5 CAPX Rate as % of Net Fixed Assets 63.6% 6.5% 16.5% 12.3% 11.7% 5.8% 50.6% 12.0% 19.3% 21.4% 14.5% 14.3% 11.5% 11.4% 11.6% 10.0% Non-Cash WC 1460.2 1195 1170.3 1410.9 748.9 947.62 1440.94 1661.42 1863.89 1966.09 2151.78 2252.04 2342.04 2383.32 2423.36 2458.83 Non-Cash WC/Revenue 39% 33% 35% 42% 28% 35% 35% 35% 35% 34% 35% 35% 35% 35% 34% 35% Chg in Non-Cash WC -265.2 -24.7 240.6 -662 198.72 493.32 220.48 202.47 102.20 185.69 100.26 89.99 41.28 40.04 35.47 FCFF 270.14 -814.91 333.31 245.42 321.63 465.03 629.42 756.99 826.90 839.24 904.35 Terminal Value 16844.5754 Total Cash Flows 270.14 -814.91 333.31 245.42 321.63 465.03 629.42 756.99 826.90 839.24 17748.93 Firm Value $11,297.26 WACC 6.42% Less: LT Debt 2452.1 Terminal Growth 1% Plus: Cash and Mkt Sec. 85.8 Shares Outstanding 183.6 Equity Value $8,930.96 Intrinsic Value $48.64 Current Value $41.80 Premium/Discount $6.84 Discount % 16%
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Relative Valuation Ratios Growth Profit(LTM) Efficiency Risk Sales Growth Net Income Growth Company (Exchange: Ticker) 1 Year 5 Year CAGR 1 Year 5 Year Anheuser-Busch InBev SA/NV (ENXTBR: ABI) 10.7 18.25 1.81% 16.72% 47.54% 27.90% 58.40% 18.65% 38.80% 9.20% - 0.56 28% Beam, Inc (NYSE:Beam) 14.4 23.03 6.70% -21.08% -58.04% -12.89% 58.40% 15.51% 29.90% 6.00% 9.10% 1.35 26% Brown-Forman Corp. (NYSE: BF.B) 14.3 23.03 0.35% 2.45% -4.17% 7.10% 67.80% 20.31% 32.40% 18.80% 25.90% 0.69 4% Central European Distribution Corp. (NasdaqGS: CEDC) 11.2 227.44 5.54% -5.90% - - 37.90% -57.08% 7.90% 1.50% -101.10% 0.71 29% Jangsu Yanghe Brewery Joint-Stock Co. (SZSE: 002304) 6.6 9.89 44.88% - 65.50% - 62.10% 34.82% 45.80% 42.90% 53.50% 0.28 0% Molson Coors Brewing Company (NYSE: TAP) 10 11.65 12.01% -8.98% -9.25% 5.62% 41.40% 14.55% 19.80% 2.80% 6.80% 0.75 58% Mean 11.2 17.17 11.88% -3.36% 8.32% 6.93% 54.33% 7.79% 29.10% 13.53% -1.16% 72.33% 24.14% Median 10.95 20.64 6.12% -5.90% -4.17% 6.36% 58.40% 17.08% 31.15% 7.60% 9.10% 70.00% 27.03% Constellation Brands Inc. (NYSE: STZ) 10.9 13.32 -0.48% -7.51% -34.21% 7.00% 40.30% 14.99% 24.40% 5.50% 15.10% 1.12 53% NTM TEV/EBITDA NTM P/E Ratio After Deal Target Multiple 11.2 Target Multiple 15.3 NTM EBITDA 1038.827 NTM EPS 2.75 Target EV 11634.859 Implied Share Price 42.08 Less: Current Price 41.80 Debt 4051.3 Premium/Discount 0.7% Preferred Stock 0 Undervalued Minority Interest 0 Plus: Cash and Equivalents 590.7 Equity Value 8174.26
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