CPB Valuation Bremer_012213

CPB Valuation Bremer_012213 - WACC Analysis Campbell Soup...

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WACC Analysis Campbell Soup Co. (CPB) Prices as of close 02/16/13 Assumptions Levered Total Mkt. Val. Debt/ Unlevered Tax Rate 35% Ticker Name Beta Debt Equity Equity Risk Free Rate 3.05% NYSE:CAG ConAgra Foods, Inc 0.70 3,777.4 12,901.3 29.3% 0.588 Mkt Risk Premium 6.15% NYSE:GIS General Mills, Inc 0.16 8,322.8 26,407.1 31.5% 0.133 CPB Weight of Debt 28.82% NYSE:HNZ H.J. Heinz Co 0.52 5,043.5 18,991.9 26.6% 0.443 CPB Cost of Debt 1.9000% NYSE:HSH Hillshire Brands Co 0.70 947.0 3,676.3 25.8% 0.600 CPB Tax Rate 31% NYSE:HRL Hormel Foods Corp 0.45 250.0 9,073.1 2.8% 0.442 NYSE:K Kellogg Co 0.47 7,937.0 20,439.6 38.8% 0.375 NYSE:MKC Mcormick & Company 0.45 1,257.5 8,670.8 14.5% 0.411 NYSE:CPB Campbell Soup Co 0.30 4,523.0 11,227.2 40.3% 0.238 Average 0.469 0.404 Average Unlevered Beta for Comps 0.404 D/E 40.3% Tax Rate 35.0% CPB Levered Beta 0.510 WACC Mkt Risk Premium 6.15% CPB Inputs (CapIQ) Multiplied by Bottom-Up Beta 0.510 Company Name Campbell Soup Co. Adj: MRP 3.13% Ticker CPB Add: RFR 3.05% Total Debt 4,523.0 Cost of Equity 6.18% Total Preferred 0 Multiplied by CPB weight of E 71.18% Cost of Equity Portion 4.40% Market Cap 11,171.20 Cash & Equivalents 335 Cost of Debt 1.90% Shares Outstanding 565.4 Tax Rate 31.00% Latest FYE 7/29/2012 A-T Cost of Debt 1.31% Multiplied By CPB Weight of debt 28.82% A-T Cost of Debt Portion 0.378% WACC 4.78% Current Price $35.71 Beta (2)
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Campbell's DCF Fiscal Years Ends beginning of August 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenue 7998 7586 7676 7719 7707 7680 7680 7718 7796 7874 7992 8112 8193 8275 8295 Revenue Growth -5.15% 1.19% 0.56% -0.16% -0.35% 0.00% 0.50% 1.00% 1.00% 1.50% 1.50% 1.00% 1.00% 0.25% Net Fixed Assets 1939 1977 2051 1963 1771 1920 1766 1775 1793 1811 1838 1866 1884 1903 1908 Net Fixed Assets / Revenues 24% 26% 27% 25% 23% 25% 23% 23% 23% 23% 23% 23% 23% 23% 23% EBIT 1293 1267 1361 1350 1227 1229 1229 1158 1169 1102 1119 1136 1065 1076 1078 EBIT Margin 16% 17% 18% 17% 16% 16% 16% 15% 15% 14% 14% 14% 13% 13% 13% Taxes 369.04 407.46 436.13 423.03 379.42 380.94 386.98 363.07 365.09 343.91 349.69 355.51 333.02 336.15 337.06 Tax Rate 28.54% 32.16% 32.05% 31.34% 30.92% 31.00% 31.49% 31.36% 31.22% 31.20% 31.25% 31.31% 31.27% 31.25% 31.26% Depreciation 271 264 251 265 259 269 230 213 215 199 202 205 188 209 191 Depr Rate as % of Net Fixed Assets 13.98% 13.35% 12.24% 13.50% 14.62% 14.00% 13.00% 12.00% 12.00% 11.00% 11.00% 11.00% 10.00% 11.00% 10.00% CAPX 304 372 302 263 322 326 300 302 287 290 294 280 283 285 267 CAPX Rate as % of Net Fixed Assets 16% 19% 15% 13% 18% 17% 17% 17% 16% 16% 16% 15% 15% 15% 14% Non-Cash WC 791 128 632 510 634 532 487 386 516 521 504 501 503 527 525 Non-Cash WC/Revenue 10% 2% 8% 7% 8% 7% 6% 5% 7% 7% 6% 6% 6% 6% 6% Chg in Non-Cash WC -663 504 -122 124 -102 -45 -101 130 5 -18 -3 2 24 -3 FCFF 660.58 892.13 816.65 806.67 602.40 662.48 695.06 708.10 635.43 639.45 667.79 Terminal Value 14780.75 Total Cash Flows 660.58 892.13 816.65 806.67 602.40 662.48 695.06 708.10 635.43 639.45 15448.54 Firm Value $14,850.85 WACC 4.78% Less: LT Debt 2058 Terminal Growth 0.25% Plus: Cash and Mkt. Sec. 335 Shares Outstanding 314.4 Equity Value $13,127.85 Analyst Valuation $41.76 Current Stock Price $38.84 Premium/Discount 8% Discount 1829 1991 1855 1847 1884 1903 1913 1960 1960 1979 Not sure about non-cash WC
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Ticker Name EV NTM EBITDA NTM EV/EBITDA NTM Forward P/E NTM EPS Beta Debt/Equity NYSE:CPB Campbell Soup Co 11,227.80 15380.83 1613.78 9.53 13.88 2.57 0.30 40% NYSE:CAG ConAgra Foods, Inc 12,899.90 16201.86 1965.81 8.24 14.16 2.19 0.70 29% NYSE:GIS General Mills, Inc 26,407.00 33995.04 3583.24 9.49 14.79 2.76 0.16 32% NYSE:HNZ H.J. Heinz Co 18,989.40 23022.05 2102.37 10.95 16.9 3.5 0.52 27% NYSE:HSH Hillshire Brands Co 3,674.90 4370.34 463.45 9.43 20.61 1.46 0.70 26% NYSE:HRL Hormel Foods Corp 9,073.50 8563.31 912.91 9.38 17.56 1.96 0.45 3% NYSE:K Kellogg Co 20,440.60 28071.55 2497.97 11.24 15.95 3.58 0.47 39% NYSE:MKC Mcormick & Company 8,671.30 9839.50 739.22 13.31 20.06 3.26 0.45 15% Mininum 3,674.90 4,370.34 463.45 8.24 13.88 1.46 0.16 0.03 Maximum 26,407.00 33,995.04 3,583.24 13.31 20.61 3.58 0.70 0.40 Average 13,923.05 17,430.56 1,734.84 10.20 16.74 2.66 0.47 0.26 Median 12,063.85 15,791.35 1,789.80 9.51 16.43 2.67 0.46 0.28 NTM P/E Target Multiple 14 FWD EPS 2.57 Target Price 35.98 Actual Price $38.84 Price Difference ($2.86) Undervalued NTM EV/EBITDA Target Multiple 9.5 EBITDA NTM 1613.78 TARGET EV 15330.91 Less Net Debt 2534 Calculated Equity Value 12796.91 Shares Outstanding 314.417 Target Price 40.70 Actual Price $38.84 Price Difference $1.86 Undervalued NTM TEV / Forward EBITDA
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Bond Symbol ISSuer name Coupon Maturity Callable Moody's S&P
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