Intrinsic value of Brookfield Property Partners - BPY

Previous Close

$20.74

  Intrinsic Value

$34.89

stock screener

  Rating & Target

str. buy

+68%

Previous close

$20.74

 
Intrinsic value

$34.89

 
Up/down potential

+68%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as BPY.

We calculate the intrinsic value of BPY 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

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, %
  10.28
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
Revenue, $m
  5,352
  5,737
  6,138
  6,554
  6,987
  7,437
  7,906
  8,393
  8,901
  9,431
  9,983
  10,558
  11,159
  11,786
  12,442
  13,126
  13,842
  14,591
  15,374
  16,193
  17,051
  17,949
  18,890
  19,875
  20,908
  21,990
  23,124
  24,313
  25,560
  26,867
  28,238
Variable operating expenses, $m
 
  3,856
  4,120
  4,394
  4,679
  4,976
  5,284
  5,605
  5,940
  6,289
  6,652
  6,956
  7,351
  7,765
  8,196
  8,647
  9,119
  9,612
  10,128
  10,668
  11,233
  11,824
  12,444
  13,093
  13,773
  14,486
  15,234
  16,017
  16,838
  17,699
  18,603
Fixed operating expenses, $m
 
  1,384
  1,418
  1,454
  1,490
  1,527
  1,566
  1,605
  1,645
  1,686
  1,728
  1,771
  1,816
  1,861
  1,908
  1,955
  2,004
  2,054
  2,106
  2,158
  2,212
  2,267
  2,324
  2,382
  2,442
  2,503
  2,565
  2,630
  2,695
  2,763
  2,832
Total operating expenses, $m
  4,921
  5,240
  5,538
  5,848
  6,169
  6,503
  6,850
  7,210
  7,585
  7,975
  8,380
  8,727
  9,167
  9,626
  10,104
  10,602
  11,123
  11,666
  12,234
  12,826
  13,445
  14,091
  14,768
  15,475
  16,215
  16,989
  17,799
  18,647
  19,533
  20,462
  21,435
Operating income, $m
  431
  498
  600
  706
  818
  934
  1,056
  1,183
  1,316
  1,456
  1,602
  1,831
  1,992
  2,161
  2,338
  2,524
  2,719
  2,924
  3,140
  3,367
  3,606
  3,857
  4,121
  4,400
  4,692
  5,000
  5,325
  5,666
  6,026
  6,405
  6,804
EBITDA, $m
  671
  680
  789
  903
  1,023
  1,147
  1,278
  1,414
  1,557
  1,706
  1,862
  2,026
  2,198
  2,378
  2,567
  2,766
  2,974
  3,194
  3,424
  3,666
  3,920
  4,188
  4,470
  4,766
  5,078
  5,406
  5,751
  6,115
  6,498
  6,901
  7,325
Interest expense (income), $m
  1,383
  1,379
  1,578
  1,799
  2,030
  2,269
  2,518
  2,777
  3,046
  3,327
  3,620
  3,925
  4,243
  4,576
  4,922
  5,285
  5,663
  6,059
  6,473
  6,906
  7,359
  7,833
  8,329
  8,849
  9,394
  9,965
  10,563
  11,190
  11,848
  12,537
  13,260
Earnings before tax, $m
  2,142
  -881
  -978
  -1,093
  -1,212
  -1,335
  -1,462
  -1,594
  -1,730
  -1,871
  -2,018
  -2,094
  -2,251
  -2,415
  -2,585
  -2,761
  -2,944
  -3,134
  -3,332
  -3,538
  -3,753
  -3,976
  -4,208
  -4,450
  -4,702
  -4,965
  -5,238
  -5,524
  -5,822
  -6,132
  -6,456
Tax expense, $m
  -575
  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
Net income, $m
  660
  -881
  -978
  -1,093
  -1,212
  -1,335
  -1,462
  -1,594
  -1,730
  -1,871
  -2,018
  -2,094
  -2,251
  -2,415
  -2,585
  -2,761
  -2,944
  -3,134
  -3,332
  -3,538
  -3,753
  -3,976
  -4,208
  -4,450
  -4,702
  -4,965
  -5,238
  -5,524
  -5,822
  -6,132
  -6,456

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,456
  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
  78,127
  81,962
  87,683
  93,630
  99,813
  106,244
  112,937
  119,904
  127,161
  134,723
  142,607
  150,832
  159,415
  168,376
  177,736
  187,518
  197,743
  208,436
  219,623
  231,329
  243,583
  256,414
  269,851
  283,929
  298,679
  314,137
  330,340
  347,326
  365,137
  383,814
  403,403
Adjusted assets (=assets-cash), $m
  76,671
  81,962
  87,683
  93,630
  99,813
  106,244
  112,937
  119,904
  127,161
  134,723
  142,607
  150,832
  159,415
  168,376
  177,736
  187,518
  197,743
  208,436
  219,623
  231,329
  243,583
  256,414
  269,851
  283,929
  298,679
  314,137
  330,340
  347,326
  365,137
  383,814
  403,403
Revenue / Adjusted assets
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
  0.070
Average production assets, $m
  571
  614
  657
  701
  748
  796
  846
  898
  952
  1,009
  1,068
  1,130
  1,194
  1,261
  1,331
  1,405
  1,481
  1,561
  1,645
  1,733
  1,824
  1,921
  2,021
  2,127
  2,237
  2,353
  2,474
  2,601
  2,735
  2,875
  3,021
Working capital, $m
  -4,164
  -562
  -602
  -642
  -685
  -729
  -775
  -823
  -872
  -924
  -978
  -1,035
  -1,094
  -1,155
  -1,219
  -1,286
  -1,357
  -1,430
  -1,507
  -1,587
  -1,671
  -1,759
  -1,851
  -1,948
  -2,049
  -2,155
  -2,266
  -2,383
  -2,505
  -2,633
  -2,767
Total debt, $m
  33,519
  36,700
  41,849
  47,201
  52,766
  58,554
  64,577
  70,847
  77,379
  84,185
  91,281
  98,683
  106,407
  114,472
  122,897
  131,700
  140,903
  150,526
  160,594
  171,130
  182,159
  193,706
  205,800
  218,470
  231,745
  245,657
  260,240
  275,528
  291,557
  308,367
  325,996
Total liabilities, $m
  70,585
  73,766
  78,915
  84,267
  89,832
  95,620
  101,643
  107,913
  114,445
  121,251
  128,347
  135,749
  143,473
  151,538
  159,963
  168,766
  177,969
  187,592
  197,660
  208,196
  219,225
  230,772
  242,866
  255,536
  268,811
  282,723
  297,306
  312,594
  328,623
  345,433
  363,062
Total equity, $m
  7,542
  8,196
  8,768
  9,363
  9,981
  10,624
  11,294
  11,990
  12,716
  13,472
  14,261
  15,083
  15,941
  16,838
  17,774
  18,752
  19,774
  20,844
  21,962
  23,133
  24,358
  25,641
  26,985
  28,393
  29,868
  31,414
  33,034
  34,733
  36,514
  38,381
  40,340
Total liabilities and equity, $m
  78,127
  81,962
  87,683
  93,630
  99,813
  106,244
  112,937
  119,903
  127,161
  134,723
  142,608
  150,832
  159,414
  168,376
  177,737
  187,518
  197,743
  208,436
  219,622
  231,329
  243,583
  256,413
  269,851
  283,929
  298,679
  314,137
  330,340
  347,327
  365,137
  383,814
  403,402
Debt-to-equity ratio
  4.444
  4.480
  4.770
  5.040
  5.290
  5.510
  5.720
  5.910
  6.090
  6.250
  6.400
  6.540
  6.670
  6.800
  6.910
  7.020
  7.130
  7.220
  7.310
  7.400
  7.480
  7.550
  7.630
  7.690
  7.760
  7.820
  7.880
  7.930
  7.980
  8.030
  8.080
Adjusted equity ratio
  0.079
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  660
  -881
  -978
  -1,093
  -1,212
  -1,335
  -1,462
  -1,594
  -1,730
  -1,871
  -2,018
  -2,094
  -2,251
  -2,415
  -2,585
  -2,761
  -2,944
  -3,134
  -3,332
  -3,538
  -3,753
  -3,976
  -4,208
  -4,450
  -4,702
  -4,965
  -5,238
  -5,524
  -5,822
  -6,132
  -6,456
Depreciation, amort., depletion, $m
  240
  182
  189
  197
  205
  213
  222
  231
  240
  250
  260
  195
  206
  217
  230
  242
  255
  269
  284
  299
  315
  331
  348
  367
  386
  406
  427
  449
  472
  496
  521
Funds from operations, $m
  431
  -699
  -789
  -896
  -1,007
  -1,121
  -1,240
  -1,363
  -1,490
  -1,621
  -1,758
  -1,899
  -2,045
  -2,197
  -2,355
  -2,519
  -2,689
  -2,865
  -3,049
  -3,240
  -3,438
  -3,645
  -3,860
  -4,083
  -4,316
  -4,559
  -4,812
  -5,075
  -5,350
  -5,636
  -5,935
Change in working capital, $m
  -314
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -92
  -97
  -101
  -106
  -111
  -117
  -122
  -128
  -134
Cash from operations, $m
  745
  -661
  -750
  -855
  -964
  -1,077
  -1,194
  -1,315
  -1,440
  -1,569
  -1,704
  -1,843
  -1,987
  -2,136
  -2,291
  -2,452
  -2,619
  -2,792
  -2,972
  -3,159
  -3,354
  -3,557
  -3,767
  -3,987
  -4,215
  -4,453
  -4,701
  -4,959
  -5,228
  -5,508
  -5,801
Maintenance CAPEX, $m
  0
  -98
  -106
  -113
  -121
  -129
  -137
  -146
  -155
  -164
  -174
  -184
  -195
  -206
  -217
  -230
  -242
  -255
  -269
  -284
  -299
  -315
  -331
  -348
  -367
  -386
  -406
  -427
  -449
  -472
  -496
New CAPEX, $m
  -7,926
  -43
  -43
  -45
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -92
  -96
  -101
  -105
  -110
  -116
  -121
  -127
  -133
  -140
  -147
Cash from investing activities, $m
  -3,234
  -141
  -149
  -158
  -167
  -177
  -187
  -198
  -209
  -221
  -233
  -246
  -259
  -273
  -287
  -303
  -319
  -335
  -353
  -372
  -391
  -411
  -432
  -453
  -477
  -502
  -527
  -554
  -582
  -612
  -643
Free cash flow, $m
  -2,489
  -803
  -898
  -1,013
  -1,132
  -1,254
  -1,381
  -1,513
  -1,649
  -1,790
  -1,937
  -2,088
  -2,246
  -2,409
  -2,578
  -2,754
  -2,937
  -3,127
  -3,325
  -3,531
  -3,745
  -3,967
  -4,199
  -4,441
  -4,692
  -4,954
  -5,228
  -5,513
  -5,810
  -6,120
  -6,443
Issuance/(repayment) of debt, $m
  2,036
  4,637
  5,149
  5,352
  5,565
  5,788
  6,023
  6,271
  6,531
  6,806
  7,096
  7,402
  7,725
  8,065
  8,424
  8,803
  9,203
  9,624
  10,068
  10,536
  11,029
  11,548
  12,094
  12,669
  13,275
  13,912
  14,583
  15,288
  16,030
  16,810
  17,630
Issuance/(repurchase) of shares, $m
  2,791
  1,535
  1,550
  1,688
  1,830
  1,978
  2,131
  2,290
  2,456
  2,628
  2,806
  2,916
  3,110
  3,311
  3,521
  3,739
  3,967
  4,204
  4,451
  4,709
  4,978
  5,259
  5,552
  5,858
  6,177
  6,510
  6,859
  7,222
  7,603
  8,000
  8,415
Cash from financing (excl. dividends), $m  
  2,906
  6,172
  6,699
  7,040
  7,395
  7,766
  8,154
  8,561
  8,987
  9,434
  9,902
  10,318
  10,835
  11,376
  11,945
  12,542
  13,170
  13,828
  14,519
  15,245
  16,007
  16,807
  17,646
  18,527
  19,452
  20,422
  21,442
  22,510
  23,633
  24,810
  26,045
Total cash flow (excl. dividends), $m
  421
  5,369
  5,801
  6,027
  6,263
  6,512
  6,773
  7,048
  7,338
  7,643
  7,966
  8,230
  8,589
  8,967
  9,367
  9,788
  10,232
  10,700
  11,194
  11,714
  12,262
  12,839
  13,447
  14,087
  14,760
  15,468
  16,214
  16,998
  17,822
  18,690
  19,601
Retained Cash Flow (-), $m
  -111
  -1,535
  -1,550
  -1,688
  -1,830
  -1,978
  -2,131
  -2,290
  -2,456
  -2,628
  -2,806
  -2,916
  -3,110
  -3,311
  -3,521
  -3,739
  -3,967
  -4,204
  -4,451
  -4,709
  -4,978
  -5,259
  -5,552
  -5,858
  -6,177
  -6,510
  -6,859
  -7,222
  -7,603
  -8,000
  -8,415
Prev. year cash balance distribution, $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 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
 
  3,834
  4,251
  4,339
  4,433
  4,534
  4,642
  4,758
  4,882
  5,016
  5,159
  5,314
  5,479
  5,656
  5,846
  6,049
  6,265
  6,497
  6,743
  7,005
  7,284
  7,580
  7,895
  8,229
  8,583
  8,958
  9,355
  9,775
  10,220
  10,690
  11,186
Discount rate, %
 
  12.60
  13.23
  13.89
  14.59
  15.32
  16.08
  16.89
  17.73
  18.62
  19.55
  20.52
  21.55
  22.63
  23.76
  24.95
  26.19
  27.50
  28.88
  30.32
  31.84
  33.43
  35.10
  36.86
  38.70
  40.64
  42.67
  44.80
  47.04
  49.39
  51.86
PV of cash for distribution, $m
 
  3,405
  3,315
  2,937
  2,572
  2,223
  1,897
  1,596
  1,323
  1,079
  865
  682
  527
  399
  296
  214
  151
  104
  70
  46
  29
  18
  11
  6
  3
  2
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  77.5
  61.0
  47.8
  37.4
  29.1
  22.7
  17.6
  13.6
  10.5
  8.1
  6.3
  4.8
  3.7
  2.9
  2.2
  1.7
  1.3
  1.0
  0.8
  0.6
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0

Brookfield Property Partners L.P. is a diversified global real estate company. The Company owns, operates and develops a portfolio of office, retail, multifamily, industrial, hospitality, triple net lease, self-storage and student housing assets. Its partnership is Brookfield Asset Management Inc.'s public commercial property entity and the primary vehicle through which it invests in real estate on a global basis. It operates through four segments: Core Office, Core Retail, Opportunistic and Corporate. As of December 31, 2016, its Core Office segment consisted of interests in 142 office properties totaling 99 million square feet. As of December 31, 2016, its Core Retail segment consisted of interests in 127 regional malls and urban retail properties. As of December 31, 2016, its Opportunistic segment consisted of 107 office properties comprising approximately 29 million square feet of office space in the United States, United Kingdom, Brazil and Asia.

FINANCIAL RATIOS  of  Brookfield Property Partners (BPY)

Valuation Ratios
P/E Ratio 8.2
Price to Sales 1
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 7.2
Price to Free Cash Flow -0.8
Growth Rates
Sales Growth Rate 10.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.4%
Cap. Spend. - 3 Yr. Gr. Rate 20%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 376.9%
Total Debt to Equity 444.4%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.2%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 1.7%
Ret/ On T. Cap. - 3 Yr. Avg. 2.9%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 16.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 63.6%
Gross Margin - 3 Yr. Avg. 62.3%
EBITDA Margin 70.3%
EBITDA Margin - 3 Yr. Avg. 112.4%
Operating Margin 8.1%
Oper. Margin - 3 Yr. Avg. 8.1%
Pre-Tax Margin 40%
Pre-Tax Margin - 3 Yr. Avg. 82.6%
Net Profit Margin 12.3%
Net Profit Margin - 3 Yr. Avg. 20.2%
Effective Tax Rate -26.8%
Eff/ Tax Rate - 3 Yr. Avg. -1.1%
Payout Ratio 0%

BPY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BPY stock intrinsic value calculation we used $5352 million for the last fiscal year's total revenue generated by Brookfield Property Partners. The default revenue input number comes from 2016 income statement of Brookfield Property Partners. 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 BPY stock valuation model: a) initial revenue growth rate of 7.2% 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 12.6%, whose default value for BPY is calculated based on our internal credit rating of Brookfield Property Partners, 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 Brookfield Property Partners.
    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 BPY stock the variable cost ratio is equal to 67.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1350 million in the base year in the intrinsic value calculation for BPY 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 4.3% for Brookfield Property Partners.

Corporate tax rate of 27% is the nominal tax rate for Brookfield Property Partners. 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 BPY 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 BPY are equal to 10.7%.

Life of production assets of 5.8 years is the average useful life of capital assets used in Brookfield Property Partners 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 BPY is equal to -9.8%. 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 - $7542 million for Brookfield Property Partners - 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 253.61 million for Brookfield Property Partners 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 Brookfield Property Partners at the current share price and the inputted number of shares is $5.3 billion.

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COMPANY NEWS

▶ Brookfield Property posts 4Q profit   [Feb-08-18 10:04AM  Associated Press]
▶ Houston energy co. to move, expand HQ within Allen Center   [Dec-22-17 09:25AM  American City Business Journals]
▶ If You're in Your 60s, Consider Buying These 2 Stocks   [Dec-17-17 09:15AM  Motley Fool]
▶ Brookfield Asset Management Trying to be More Careful   [Dec-11-17 05:38PM  Bloomberg Video]
▶ If You're Retired, Consider Buying These 3 Stocks   [Sep-16-17 11:32AM  Motley Fool]
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▶ Brookfields Flatt Is Excited About The U.S. Overall   [May-02-17 12:04PM  Bloomberg Video]
▶ 3 Stocks We're Never Selling   [Apr-10-17 03:38PM  Motley Fool]
▶ 2 Stocks to Buy With Dividends Yielding More Than 5%   [Mar-31-17 01:29PM  Motley Fool]
▶ Losing Sleep Over Your Portfolio? Consider These Stocks   [Mar-18-17 08:00AM  Motley Fool]
▶ Brookfield Property Partners Completes Annual Filings   [Mar-10-17 10:00AM  GlobeNewswire]
▶ 4 Stocks You Can Buy and Hold Forever   [Feb-24-17 10:00AM  at Motley Fool]
▶ 4 High-Yield Dividend Stocks You Don't Have to Babysit   [Feb-15-17 09:25AM  at Motley Fool]
▶ 7 Top Stocks to Buy in February   [Jan-31-17 07:30AM  at Motley Fool]
▶ 3 Stocks to Help You Build Retirement Wealth   [Dec-28-16 08:23PM  at Motley Fool]
▶ Brookfield lands two tenants at repositioned 2001 M   [11:55AM  at bizjournals.com]
Financial statements of BPY
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.

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