Intrinsic value of Cott Corporation - BCB

Previous Close

$18.99

  Intrinsic Value

$22.70

stock screener

  Rating & Target

hold

+20%

Previous close

$18.99

 
Intrinsic value

$22.70

 
Up/down potential

+20%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BCB stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Cott Corporation (BCB) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.90
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  4,372
  4,805
  5,257
  5,728
  6,220
  6,730
  7,262
  7,814
  8,388
  8,984
  9,604
  10,248
  10,918
  11,615
  12,340
  13,096
  13,883
  14,703
  15,558
  16,450
  17,382
  18,355
  19,371
  20,433
  21,543
  22,704
  23,920
  25,191
  26,523
  27,917
  29,377
Variable operating expenses, $m
 
  4,627
  5,050
  5,490
  5,948
  6,425
  6,921
  7,437
  7,972
  8,529
  9,108
  9,568
  10,193
  10,844
  11,521
  12,226
  12,961
  13,727
  14,525
  15,358
  16,228
  17,136
  18,085
  19,076
  20,113
  21,197
  22,332
  23,519
  24,762
  26,063
  27,427
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  4,261
  4,627
  5,050
  5,490
  5,948
  6,425
  6,921
  7,437
  7,972
  8,529
  9,108
  9,568
  10,193
  10,844
  11,521
  12,226
  12,961
  13,727
  14,525
  15,358
  16,228
  17,136
  18,085
  19,076
  20,113
  21,197
  22,332
  23,519
  24,762
  26,063
  27,427
Operating income, $m
  111
  177
  207
  239
  271
  305
  340
  377
  415
  455
  496
  680
  725
  771
  819
  869
  922
  976
  1,033
  1,092
  1,154
  1,219
  1,286
  1,356
  1,430
  1,507
  1,588
  1,672
  1,761
  1,853
  1,950
EBITDA, $m
  434
  515
  563
  614
  666
  721
  778
  837
  898
  962
  1,029
  1,098
  1,169
  1,244
  1,322
  1,403
  1,487
  1,575
  1,666
  1,762
  1,862
  1,966
  2,075
  2,188
  2,307
  2,432
  2,562
  2,698
  2,841
  2,990
  3,146
Interest expense (income), $m
  169
  115
  156
  199
  244
  290
  339
  389
  442
  496
  553
  611
  673
  736
  802
  871
  943
  1,017
  1,095
  1,176
  1,261
  1,349
  1,442
  1,538
  1,639
  1,744
  1,854
  1,970
  2,090
  2,217
  2,349
Earnings before tax, $m
  -62
  62
  51
  40
  27
  15
  2
  -12
  -26
  -41
  -57
  69
  52
  35
  17
  -2
  -21
  -41
  -62
  -84
  -107
  -131
  -156
  -182
  -209
  -237
  -266
  -297
  -329
  -363
  -399
Tax expense, $m
  35
  17
  14
  11
  7
  4
  0
  0
  0
  0
  0
  19
  14
  9
  5
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -105
  46
  37
  29
  20
  11
  1
  -12
  -26
  -41
  -57
  50
  38
  25
  12
  -2
  -21
  -41
  -62
  -84
  -107
  -131
  -156
  -182
  -209
  -237
  -266
  -297
  -329
  -363
  -399

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  106
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,323
  5,734
  6,273
  6,836
  7,422
  8,032
  8,666
  9,324
  10,009
  10,721
  11,460
  12,229
  13,029
  13,860
  14,726
  15,627
  16,566
  17,545
  18,566
  19,631
  20,742
  21,903
  23,115
  24,383
  25,708
  27,094
  28,544
  30,061
  31,650
  33,313
  35,056
Adjusted assets (=assets-cash), $m
  5,217
  5,734
  6,273
  6,836
  7,422
  8,032
  8,666
  9,324
  10,009
  10,721
  11,460
  12,229
  13,029
  13,860
  14,726
  15,627
  16,566
  17,545
  18,566
  19,631
  20,742
  21,903
  23,115
  24,383
  25,708
  27,094
  28,544
  30,061
  31,650
  33,313
  35,056
Revenue / Adjusted assets
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
  0.838
Average production assets, $m
  1,495
  1,643
  1,798
  1,959
  2,127
  2,302
  2,483
  2,672
  2,869
  3,073
  3,284
  3,505
  3,734
  3,972
  4,220
  4,479
  4,748
  5,028
  5,321
  5,626
  5,945
  6,277
  6,625
  6,988
  7,368
  7,765
  8,180
  8,615
  9,071
  9,548
  10,047
Working capital, $m
  58
  -48
  -53
  -57
  -62
  -67
  -73
  -78
  -84
  -90
  -96
  -102
  -109
  -116
  -123
  -131
  -139
  -147
  -156
  -165
  -174
  -184
  -194
  -204
  -215
  -227
  -239
  -252
  -265
  -279
  -294
Total debt, $m
  1,154
  1,562
  1,991
  2,439
  2,904
  3,389
  3,893
  4,417
  4,961
  5,527
  6,115
  6,726
  7,362
  8,023
  8,711
  9,428
  10,174
  10,952
  11,764
  12,610
  13,494
  14,417
  15,381
  16,388
  17,442
  18,543
  19,696
  20,903
  22,166
  23,488
  24,874
Total liabilities, $m
  4,149
  4,558
  4,987
  5,435
  5,900
  6,385
  6,889
  7,413
  7,957
  8,523
  9,111
  9,722
  10,358
  11,019
  11,707
  12,424
  13,170
  13,948
  14,760
  15,606
  16,490
  17,413
  18,377
  19,384
  20,438
  21,539
  22,692
  23,899
  25,162
  26,484
  27,870
Total equity, $m
  1,173
  1,175
  1,286
  1,401
  1,521
  1,646
  1,776
  1,912
  2,052
  2,198
  2,349
  2,507
  2,671
  2,841
  3,019
  3,204
  3,396
  3,597
  3,806
  4,024
  4,252
  4,490
  4,739
  4,998
  5,270
  5,554
  5,851
  6,163
  6,488
  6,829
  7,186
Total liabilities and equity, $m
  5,322
  5,733
  6,273
  6,836
  7,421
  8,031
  8,665
  9,325
  10,009
  10,721
  11,460
  12,229
  13,029
  13,860
  14,726
  15,628
  16,566
  17,545
  18,566
  19,630
  20,742
  21,903
  23,116
  24,382
  25,708
  27,093
  28,543
  30,062
  31,650
  33,313
  35,056
Debt-to-equity ratio
  0.984
  1.330
  1.550
  1.740
  1.910
  2.060
  2.190
  2.310
  2.420
  2.510
  2.600
  2.680
  2.760
  2.820
  2.890
  2.940
  3.000
  3.050
  3.090
  3.130
  3.170
  3.210
  3.250
  3.280
  3.310
  3.340
  3.370
  3.390
  3.420
  3.440
  3.460
Adjusted equity ratio
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -105
  46
  37
  29
  20
  11
  1
  -12
  -26
  -41
  -57
  50
  38
  25
  12
  -2
  -21
  -41
  -62
  -84
  -107
  -131
  -156
  -182
  -209
  -237
  -266
  -297
  -329
  -363
  -399
Depreciation, amort., depletion, $m
  323
  337
  356
  375
  395
  416
  437
  460
  483
  507
  533
  417
  445
  473
  502
  533
  565
  599
  633
  670
  708
  747
  789
  832
  877
  924
  974
  1,026
  1,080
  1,137
  1,196
Funds from operations, $m
  429
  383
  393
  404
  415
  426
  438
  448
  457
  466
  476
  468
  483
  498
  515
  531
  544
  557
  571
  586
  601
  616
  633
  650
  668
  688
  707
  728
  750
  773
  798
Change in working capital, $m
  64
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
Cash from operations, $m
  365
  387
  398
  408
  420
  432
  444
  453
  462
  472
  482
  474
  489
  505
  522
  539
  552
  565
  580
  594
  610
  626
  643
  661
  680
  699
  720
  741
  764
  787
  812
Maintenance CAPEX, $m
  0
  -178
  -196
  -214
  -233
  -253
  -274
  -296
  -318
  -341
  -366
  -391
  -417
  -445
  -473
  -502
  -533
  -565
  -599
  -633
  -670
  -708
  -747
  -789
  -832
  -877
  -924
  -974
  -1,026
  -1,080
  -1,137
New CAPEX, $m
  -200
  -149
  -155
  -161
  -168
  -175
  -182
  -189
  -196
  -204
  -212
  -220
  -229
  -238
  -248
  -258
  -269
  -281
  -293
  -305
  -319
  -333
  -348
  -363
  -380
  -397
  -416
  -435
  -455
  -477
  -499
Cash from investing activities, $m
  -1,482
  -327
  -351
  -375
  -401
  -428
  -456
  -485
  -514
  -545
  -578
  -611
  -646
  -683
  -721
  -760
  -802
  -846
  -892
  -938
  -989
  -1,041
  -1,095
  -1,152
  -1,212
  -1,274
  -1,340
  -1,409
  -1,481
  -1,557
  -1,636
Free cash flow, $m
  -1,117
  60
  47
  33
  19
  4
  -12
  -31
  -52
  -73
  -96
  -137
  -157
  -178
  -199
  -222
  -250
  -280
  -312
  -344
  -378
  -414
  -452
  -491
  -532
  -575
  -620
  -668
  -717
  -769
  -824
Issuance/(repayment) of debt, $m
  781
  412
  429
  447
  466
  485
  504
  524
  544
  566
  588
  611
  636
  661
  688
  717
  747
  778
  811
  847
  884
  923
  964
  1,008
  1,053
  1,102
  1,153
  1,206
  1,263
  1,323
  1,385
Issuance/(repurchase) of shares, $m
  488
  59
  73
  86
  100
  114
  129
  147
  167
  187
  208
  107
  126
  145
  165
  187
  214
  242
  272
  303
  335
  369
  404
  441
  480
  521
  564
  608
  655
  704
  756
Cash from financing (excl. dividends), $m  
  1,225
  471
  502
  533
  566
  599
  633
  671
  711
  753
  796
  718
  762
  806
  853
  904
  961
  1,020
  1,083
  1,150
  1,219
  1,292
  1,368
  1,449
  1,533
  1,623
  1,717
  1,814
  1,918
  2,027
  2,141
Total cash flow (excl. dividends), $m
  97
  532
  549
  567
  585
  602
  621
  640
  659
  679
  701
  581
  604
  629
  654
  681
  710
  740
  772
  805
  840
  877
  917
  958
  1,002
  1,048
  1,096
  1,147
  1,201
  1,258
  1,317
Retained Cash Flow (-), $m
  -309
  -104
  -111
  -115
  -120
  -125
  -130
  -147
  -167
  -187
  -208
  -158
  -164
  -171
  -177
  -187
  -214
  -242
  -272
  -303
  -335
  -369
  -404
  -441
  -480
  -521
  -564
  -608
  -655
  -704
  -756
Prev. year cash balance distribution, $m
 
  102
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  529
  439
  452
  464
  477
  491
  492
  492
  492
  492
  424
  440
  458
  477
  495
  496
  498
  500
  502
  505
  509
  512
  517
  521
  527
  532
  539
  546
  553
  561
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  495
  382
  362
  342
  319
  296
  265
  235
  205
  178
  131
  115
  100
  86
  72
  58
  46
  36
  27
  20
  15
  11
  8
  5
  3
  2
  1
  1
  1
  0
Current shareholders' claim on cash, %
  100
  97.6
  95.0
  92.2
  89.4
  86.5
  83.6
  80.7
  77.6
  74.6
  71.6
  70.2
  68.7
  67.0
  65.4
  63.6
  61.8
  59.9
  57.9
  56.0
  54.0
  52.0
  50.0
  48.0
  46.0
  44.1
  42.2
  40.3
  38.5
  36.8
  35.0

Cott Corp is a Canada-based company, which along with its subsidiaries, is engaged in production of beverages on behalf of retailers, brand owners and distributors. The Company operates through five operating segments: Water & Coffee Solutions; Cott North America; Cott United Kingdom (Cott U.K.), Royal Crown International (RCI) and Mexico. Water & Coffee Solutions segment provides direct-to-consumer products, such as bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers, and filtration equipment. Its traditional business consists of its Cott North America, Cott U.K. and All Other segments. Its traditional business produces products, including carbonated soft drinks, shelf stable juice and juice-based products, clear, still and sparkling flavored waters, energy drinks and shots, sports drinks, new age beverages, ready-to liquid enhancers, freezables, hot chocolate, creamers/whiteners, cereals and beverage concentrates directly or through third-party manufacturers.

FINANCIAL RATIOS  of  Cott Corporation (BCB)

Valuation Ratios
P/E Ratio -25.1
Price to Sales 0.6
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 7.2
Price to Free Cash Flow 16
Growth Rates
Sales Growth Rate 9.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28.2%
Cap. Spend. - 3 Yr. Gr. Rate 19.2%
Financial Strength
Quick Ratio 27
Current Ratio 0.4
LT Debt to Equity 98%
Total Debt to Equity 98.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.5%
Ret/ On Assets - 3 Yr. Avg. -10.6%
Return On Total Capital -3.9%
Ret/ On T. Cap. - 3 Yr. Avg. -0.9%
Return On Equity -10.3%
Return On Equity - 3 Yr. Avg. -2.1%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 33.2%
Gross Margin - 3 Yr. Avg. 25.6%
EBITDA Margin 9.8%
EBITDA Margin - 3 Yr. Avg. 8.8%
Operating Margin 2.5%
Oper. Margin - 3 Yr. Avg. 2.2%
Pre-Tax Margin -1.4%
Pre-Tax Margin - 3 Yr. Avg. -1.2%
Net Profit Margin -2.4%
Net Profit Margin - 3 Yr. Avg. -0.5%
Effective Tax Rate -56.5%
Eff/ Tax Rate - 3 Yr. Avg. 371%
Payout Ratio -40%

BCB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BCB stock intrinsic value calculation we used $4372 million for the last fiscal year's total revenue generated by Cott Corporation. The default revenue input number comes from 2016 income statement of Cott Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BCB stock valuation model: a) initial revenue growth rate of 9.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for BCB is calculated based on our internal credit rating of Cott Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Cott Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BCB stock the variable cost ratio is equal to 96.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BCB stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 10% for Cott Corporation.

Corporate tax rate of 27% is the nominal tax rate for Cott Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BCB stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BCB are equal to 34.2%.

Life of production assets of 8.4 years is the average useful life of capital assets used in Cott Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BCB is equal to -1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1173 million for Cott Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 139.18 million for Cott Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Cott Corporation at the current share price and the inputted number of shares is $2.6 billion.

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Financial statements of BCB
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