Intrinsic value of Ball - BLL

Previous Close

$76.89

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$76.89

 
Intrinsic value

$254.04

 
Up/down potential

+230%

 
Rating

str. buy

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

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

We calculate the intrinsic value of BLL 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.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 13.6

 

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, %
  13.30
  36.30
  33.17
  30.35
  27.82
  25.54
  23.48
  21.63
  19.97
  18.47
  17.13
  15.91
  14.82
  13.84
  12.96
  12.16
  11.44
  10.80
  10.22
  9.70
  9.23
  8.81
  8.42
  8.08
  7.77
  7.50
  7.25
  7.02
  6.82
  6.64
  6.47
Revenue, $m
  9,061
  12,350
  16,447
  21,439
  27,403
  34,400
  42,478
  51,668
  61,986
  73,437
  86,014
  99,702
  114,480
  130,324
  147,209
  165,110
  184,006
  203,879
  224,715
  246,508
  269,256
  292,965
  317,647
  343,320
  370,010
  397,749
  426,574
  456,529
  487,665
  520,037
  553,705
Variable operating expenses, $m
 
  11,412
  15,028
  19,435
  24,700
  30,877
  38,008
  46,120
  55,229
  65,338
  76,440
  88,014
  101,060
  115,046
  129,952
  145,755
  162,435
  179,978
  198,372
  217,610
  237,691
  258,621
  280,409
  303,073
  326,634
  351,121
  376,567
  403,010
  430,496
  459,073
  488,794
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
  8,727
  11,412
  15,028
  19,435
  24,700
  30,877
  38,008
  46,120
  55,229
  65,338
  76,440
  88,014
  101,060
  115,046
  129,952
  145,755
  162,435
  179,978
  198,372
  217,610
  237,691
  258,621
  280,409
  303,073
  326,634
  351,121
  376,567
  403,010
  430,496
  459,073
  488,794
Operating income, $m
  334
  938
  1,419
  2,004
  2,703
  3,523
  4,470
  5,547
  6,757
  8,100
  9,574
  11,688
  13,421
  15,278
  17,257
  19,356
  21,571
  23,901
  26,343
  28,898
  31,565
  34,344
  37,238
  40,247
  43,376
  46,628
  50,007
  53,519
  57,169
  60,964
  64,911
EBITDA, $m
  787
  1,793
  2,387
  3,112
  3,977
  4,993
  6,165
  7,499
  8,997
  10,659
  12,484
  14,471
  16,616
  18,916
  21,366
  23,964
  26,707
  29,591
  32,616
  35,779
  39,080
  42,522
  46,104
  49,830
  53,704
  57,730
  61,914
  66,262
  70,781
  75,479
  80,366
Interest expense (income), $m
  190
  256
  415
  613
  854
  1,143
  1,481
  1,872
  2,316
  2,815
  3,369
  3,977
  4,638
  5,353
  6,119
  6,935
  7,801
  8,715
  9,675
  10,683
  11,737
  12,836
  13,983
  15,176
  16,418
  17,708
  19,049
  20,443
  21,891
  23,397
  24,962
Earnings before tax, $m
  125
  682
  1,004
  1,391
  1,849
  2,380
  2,989
  3,676
  4,441
  5,285
  6,205
  7,711
  8,782
  9,925
  11,138
  12,420
  13,770
  15,186
  16,668
  18,215
  19,828
  21,508
  23,255
  25,071
  26,959
  28,920
  30,958
  33,076
  35,278
  37,567
  39,949
Tax expense, $m
  -126
  184
  271
  376
  499
  643
  807
  992
  1,199
  1,427
  1,675
  2,082
  2,371
  2,680
  3,007
  3,354
  3,718
  4,100
  4,500
  4,918
  5,354
  5,807
  6,279
  6,769
  7,279
  7,808
  8,359
  8,931
  9,525
  10,143
  10,786
Net income, $m
  263
  498
  733
  1,015
  1,349
  1,738
  2,182
  2,683
  3,242
  3,858
  4,530
  5,629
  6,411
  7,245
  8,131
  9,067
  10,052
  11,086
  12,168
  13,297
  14,475
  15,701
  16,976
  18,302
  19,680
  21,112
  22,599
  24,146
  25,753
  27,424
  29,163

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  597
  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
  16,173
  21,220
  28,259
  36,836
  47,083
  59,107
  72,986
  88,776
  106,505
  126,181
  147,791
  171,309
  196,701
  223,925
  252,937
  283,695
  316,162
  350,308
  386,109
  423,553
  462,640
  503,377
  545,785
  589,897
  635,757
  683,417
  732,945
  784,415
  837,912
  893,534
  951,383
Adjusted assets (=assets-cash), $m
  15,576
  21,220
  28,259
  36,836
  47,083
  59,107
  72,986
  88,776
  106,505
  126,181
  147,791
  171,309
  196,701
  223,925
  252,937
  283,695
  316,162
  350,308
  386,109
  423,553
  462,640
  503,377
  545,785
  589,897
  635,757
  683,417
  732,945
  784,415
  837,912
  893,534
  951,383
Revenue / Adjusted assets
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
Average production assets, $m
  4,601
  6,274
  8,355
  10,891
  13,920
  17,475
  21,579
  26,247
  31,489
  37,306
  43,695
  50,649
  58,156
  66,205
  74,782
  83,876
  93,475
  103,571
  114,155
  125,226
  136,782
  148,826
  161,365
  174,407
  187,965
  202,056
  216,700
  231,917
  247,734
  264,179
  281,282
Working capital, $m
  684
  420
  559
  729
  932
  1,170
  1,444
  1,757
  2,108
  2,497
  2,924
  3,390
  3,892
  4,431
  5,005
  5,614
  6,256
  6,932
  7,640
  8,381
  9,155
  9,961
  10,800
  11,673
  12,580
  13,523
  14,504
  15,522
  16,581
  17,681
  18,826
Total debt, $m
  7,532
  11,855
  17,514
  24,410
  32,649
  42,316
  53,475
  66,170
  80,424
  96,243
  113,618
  132,527
  152,942
  174,830
  198,155
  222,885
  248,988
  276,441
  305,225
  335,331
  366,756
  399,509
  433,605
  469,072
  505,942
  544,262
  584,082
  625,463
  668,475
  713,195
  759,706
Total liabilities, $m
  12,738
  17,061
  22,720
  29,616
  37,855
  47,522
  58,681
  71,376
  85,630
  101,449
  118,824
  137,733
  158,148
  180,036
  203,361
  228,091
  254,194
  281,647
  310,431
  340,537
  371,962
  404,715
  438,811
  474,278
  511,148
  549,468
  589,288
  630,669
  673,681
  718,401
  764,912
Total equity, $m
  3,435
  4,159
  5,539
  7,220
  9,228
  11,585
  14,305
  17,400
  20,875
  24,731
  28,967
  33,577
  38,553
  43,889
  49,576
  55,604
  61,968
  68,660
  75,677
  83,016
  90,677
  98,662
  106,974
  115,620
  124,608
  133,950
  143,657
  153,745
  164,231
  175,133
  186,471
Total liabilities and equity, $m
  16,173
  21,220
  28,259
  36,836
  47,083
  59,107
  72,986
  88,776
  106,505
  126,180
  147,791
  171,310
  196,701
  223,925
  252,937
  283,695
  316,162
  350,307
  386,108
  423,553
  462,639
  503,377
  545,785
  589,898
  635,756
  683,418
  732,945
  784,414
  837,912
  893,534
  951,383
Debt-to-equity ratio
  2.193
  2.850
  3.160
  3.380
  3.540
  3.650
  3.740
  3.800
  3.850
  3.890
  3.920
  3.950
  3.970
  3.980
  4.000
  4.010
  4.020
  4.030
  4.030
  4.040
  4.040
  4.050
  4.050
  4.060
  4.060
  4.060
  4.070
  4.070
  4.070
  4.070
  4.070
Adjusted equity ratio
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  263
  498
  733
  1,015
  1,349
  1,738
  2,182
  2,683
  3,242
  3,858
  4,530
  5,629
  6,411
  7,245
  8,131
  9,067
  10,052
  11,086
  12,168
  13,297
  14,475
  15,701
  16,976
  18,302
  19,680
  21,112
  22,599
  24,146
  25,753
  27,424
  29,163
Depreciation, amort., depletion, $m
  453
  854
  969
  1,108
  1,274
  1,470
  1,695
  1,952
  2,240
  2,559
  2,910
  2,783
  3,195
  3,638
  4,109
  4,609
  5,136
  5,691
  6,272
  6,881
  7,516
  8,177
  8,866
  9,583
  10,328
  11,102
  11,907
  12,743
  13,612
  14,515
  15,455
Funds from operations, $m
  -315
  1,352
  1,701
  2,123
  2,624
  3,207
  3,877
  4,635
  5,482
  6,417
  7,440
  8,412
  9,606
  10,883
  12,240
  13,676
  15,188
  16,777
  18,440
  20,178
  21,990
  23,878
  25,842
  27,885
  30,008
  32,214
  34,506
  36,888
  39,365
  41,939
  44,618
Change in working capital, $m
  -509
  112
  139
  170
  203
  238
  275
  312
  351
  389
  428
  465
  502
  539
  574
  609
  642
  676
  708
  741
  773
  806
  839
  873
  907
  943
  980
  1,018
  1,059
  1,101
  1,145
Cash from operations, $m
  194
  2,961
  1,562
  1,953
  2,421
  2,970
  3,603
  4,323
  5,131
  6,028
  7,013
  7,947
  9,104
  10,344
  11,666
  13,067
  14,546
  16,101
  17,731
  19,437
  21,217
  23,072
  25,003
  27,012
  29,100
  31,271
  33,526
  35,870
  38,306
  40,839
  43,473
Maintenance CAPEX, $m
  0
  -253
  -345
  -459
  -598
  -765
  -960
  -1,186
  -1,442
  -1,730
  -2,050
  -2,401
  -2,783
  -3,195
  -3,638
  -4,109
  -4,609
  -5,136
  -5,691
  -6,272
  -6,881
  -7,516
  -8,177
  -8,866
  -9,583
  -10,328
  -11,102
  -11,907
  -12,743
  -13,612
  -14,515
New CAPEX, $m
  -606
  -1,673
  -2,081
  -2,536
  -3,030
  -3,555
  -4,104
  -4,668
  -5,242
  -5,817
  -6,389
  -6,953
  -7,507
  -8,049
  -8,578
  -9,094
  -9,599
  -10,095
  -10,585
  -11,071
  -11,556
  -12,044
  -12,538
  -13,042
  -13,559
  -14,091
  -14,643
  -15,217
  -15,817
  -16,445
  -17,104
Cash from investing activities, $m
  672
  -1,926
  -2,426
  -2,995
  -3,628
  -4,320
  -5,064
  -5,854
  -6,684
  -7,547
  -8,439
  -9,354
  -10,290
  -11,244
  -12,216
  -13,203
  -14,208
  -15,231
  -16,276
  -17,343
  -18,437
  -19,560
  -20,715
  -21,908
  -23,142
  -24,419
  -25,745
  -27,124
  -28,560
  -30,057
  -31,619
Free cash flow, $m
  866
  1,035
  -864
  -1,042
  -1,207
  -1,350
  -1,461
  -1,531
  -1,553
  -1,520
  -1,426
  -1,407
  -1,186
  -900
  -549
  -136
  338
  870
  1,456
  2,094
  2,780
  3,512
  4,288
  5,104
  5,959
  6,852
  7,781
  8,746
  9,746
  10,782
  11,854
Issuance/(repayment) of debt, $m
  -231
  4,545
  5,659
  6,896
  8,239
  9,667
  11,159
  12,695
  14,254
  15,819
  17,374
  18,909
  20,415
  21,888
  23,325
  24,730
  26,104
  27,453
  28,784
  30,106
  31,425
  32,753
  34,096
  35,466
  36,871
  38,319
  39,820
  41,382
  43,012
  44,720
  46,511
Issuance/(repurchase) of shares, $m
  -59
  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 from financing (excl. dividends), $m  
  -304
  4,545
  5,659
  6,896
  8,239
  9,667
  11,159
  12,695
  14,254
  15,819
  17,374
  18,909
  20,415
  21,888
  23,325
  24,730
  26,104
  27,453
  28,784
  30,106
  31,425
  32,753
  34,096
  35,466
  36,871
  38,319
  39,820
  41,382
  43,012
  44,720
  46,511
Total cash flow (excl. dividends), $m
  456
  5,580
  4,795
  5,855
  7,032
  8,317
  9,698
  11,164
  12,701
  14,299
  15,948
  17,502
  19,229
  20,988
  22,776
  24,594
  26,442
  28,322
  30,240
  32,199
  34,205
  36,265
  38,384
  40,570
  42,830
  45,171
  47,601
  50,127
  52,758
  55,502
  58,365
Retained Cash Flow (-), $m
  -2,184
  -1,099
  -1,380
  -1,681
  -2,008
  -2,357
  -2,720
  -3,095
  -3,475
  -3,856
  -4,236
  -4,610
  -4,977
  -5,336
  -5,686
  -6,029
  -6,364
  -6,692
  -7,017
  -7,339
  -7,661
  -7,984
  -8,312
  -8,646
  -8,988
  -9,341
  -9,707
  -10,088
  -10,486
  -10,902
  -11,339
Prev. year cash balance distribution, $m
 
  375
  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
 
  4,856
  3,416
  4,173
  5,023
  5,960
  6,978
  8,069
  9,226
  10,443
  11,713
  12,892
  14,252
  15,652
  17,090
  18,565
  20,078
  21,630
  23,223
  24,860
  26,545
  28,280
  30,072
  31,924
  33,841
  35,829
  37,894
  40,039
  42,273
  44,600
  47,027
Discount rate, %
 
  10.10
  10.61
  11.14
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.05
  20.00
  21.00
  22.05
  23.15
  24.31
  25.52
  26.80
  28.14
  29.55
  31.02
  32.57
  34.20
  35.91
  37.71
  39.59
  41.57
PV of cash for distribution, $m
 
  4,410
  2,792
  3,040
  3,228
  3,340
  3,371
  3,318
  3,187
  2,987
  2,732
  2,414
  2,106
  1,793
  1,489
  1,205
  951
  731
  547
  398
  282
  193
  129
  83
  52
  31
  18
  10
  5
  3
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Ball Corporation supplies metal packaging products to the beverage, food, personal care, and household industries worldwide. It operates in four segments: Metal Beverage Packaging, Americas and Asia; Metal Beverage Packaging, Europe; Metal Food and Household Products Packaging; and Aerospace and Technologies. The Metal Beverage Packaging, Americas and Asia segment manufactures and sells metal beverage containers to fillers of carbonated soft drinks, beer, energy drinks, and other beverages. The Metal Beverage Packaging, Europe segment manufactures and sells metal beverage containers and ends for producers of carbonated soft drinks, beer, energy drinks, and other beverages. The Metal Food and Household Products Packaging segment offers steel food, aerosol, paint, and general line and decorative specialty containers, as well as extruded aluminum beverage and aerosol containers, and aluminum slugs. The Aerospace and Technologies segment designs, develops, and manufactures aerospace systems, including spacecraft, instruments and sensors, radio frequency systems and components, data exploitation solutions, and aerospace technologies and products for civil, commercial, and national security aerospace markets. It is also involved in the design, manufacture, and testing of satellites, remote sensors, and ground station control hardware and software, as well as provides related services, such as launch vehicle integration and satellite operations. In addition, this segment provides target identification, warning, and attitude control systems and components; cryogenic systems for reactant storage, and associated sensor cooling devices; star trackers; and fast-steering mirrors, as well as technical services and products to government agencies, prime contractors, and commercial organizations for various information warfare, electronic warfare, avionics, intelligence, training, and space system needs. The company was founded in 1880 and is headquartered in Broomfield, Colorado.

FINANCIAL RATIOS  of  Ball (BLL)

Valuation Ratios
P/E Ratio 51.1
Price to Sales 1.5
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 69.3
Price to Free Cash Flow -32.6
Growth Rates
Sales Growth Rate 13.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 14.8%
Cap. Spend. - 3 Yr. Gr. Rate 9.9%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 212.8%
Total Debt to Equity 219.3%
Interest Coverage 2
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 5.8%
Return On Total Capital 3%
Ret/ On T. Cap. - 3 Yr. Avg. 6.3%
Return On Equity 11.2%
Return On Equity - 3 Yr. Avg. 25.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 19.5%
Gross Margin - 3 Yr. Avg. 19.4%
EBITDA Margin 8.5%
EBITDA Margin - 3 Yr. Avg. 10.3%
Operating Margin 3.7%
Oper. Margin - 3 Yr. Avg. 6.4%
Pre-Tax Margin 1.4%
Pre-Tax Margin - 3 Yr. Avg. 4.4%
Net Profit Margin 2.9%
Net Profit Margin - 3 Yr. Avg. 4%
Effective Tax Rate -100.8%
Eff/ Tax Rate - 3 Yr. Avg. -21.3%
Payout Ratio 31.6%

BLL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BLL stock intrinsic value calculation we used $9061 million for the last fiscal year's total revenue generated by Ball. The default revenue input number comes from 2016 income statement of Ball. 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 BLL stock valuation model: a) initial revenue growth rate of 36.3% 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 10.1%, whose default value for BLL is calculated based on our internal credit rating of Ball, 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 Ball.
    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 BLL stock the variable cost ratio is equal to 93.9%.

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 BLL 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 3.5% for Ball.

Corporate tax rate of 27% is the nominal tax rate for Ball. 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 BLL 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 BLL are equal to 50.8%.

Life of production assets of 18.2 years is the average useful life of capital assets used in Ball 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 BLL is equal to 3.4%. 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 - $3435 million for Ball - 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 176.542 million for Ball 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 Ball at the current share price and the inputted number of shares is $13.6 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
CCK Crown Holdings 56.09 0.66  str.sell
SLGN Silgan Holding 60.62 33.17  sell
GEF Greif Cl A 58.62 35.58  sell
TAP Molson Coors B 95.89 29.64  str.sell
BA Boeing 184.83 77.22  str.sell

COMPANY NEWS

▶ Ball Corp. Value Analysis (NYSE:BLL) : April 25, 2017   [Apr-25-17 04:05PM  Capital Cube]
▶ What are Colorado's most valuable brands?   [Mar-30-17 10:37AM  at bizjournals.com]
▶ Ball to Announce First Quarter Earnings on May 4, 2017   [Mar-27-17 06:10PM  PR Newswire]
▶ [$$] Ball Corp.: The Can-Do Can Maker   [Mar-11-17 12:36AM  Barrons.com]
▶ [$$] King Of Cans   [Feb-27-17 07:00AM  at The Wall Street Journal]
▶ Ball Aerospace Awarded Spacecraft Operation Support   [Feb-13-17 07:45PM  PR Newswire]
▶ Ball Aerocan India Wins Asia CanTech Award   [Feb-08-17 09:00AM  PR Newswire]
▶ Ball Reports 2016 Results   [06:00AM  PR Newswire]
▶ Ball Corporation Declares Quarterly Dividend   [Jan-25-17 04:15PM  PR Newswire]
▶ Ball to Announce Fourth Quarter Earnings on Feb. 2, 2017   [Dec-29-16 04:10PM  PR Newswire]
▶ Ball Corporation (BLL): Are Hedge Funds Right About This Stock?   [Dec-07-16 06:11AM  at Insider Monkey]
Stock chart of BLL Financial statements of BLL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.