Intrinsic value of CIT Group - CIT

Previous Close

$52.24

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$52.24

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

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

We calculate the intrinsic value of CIT 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, %
  -100.00
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.86
  5.77
  5.69
  5.62
  5.56
  5.51
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
Revenue, $m
  0
  2,629
  2,895
  3,174
  3,464
  3,767
  4,082
  4,410
  4,751
  5,105
  5,473
  5,856
  6,253
  6,666
  7,096
  7,544
  8,009
  8,494
  9,000
  9,527
  10,077
  10,650
  11,249
  11,875
  12,528
  13,212
  13,926
  14,674
  15,456
  16,275
  17,133
Variable operating expenses, $m
 
  2,587
  2,849
  3,123
  3,409
  3,707
  4,017
  4,340
  4,675
  5,023
  5,386
  5,762
  6,153
  6,560
  6,983
  7,423
  7,881
  8,358
  8,856
  9,374
  9,915
  10,480
  11,069
  11,685
  12,328
  13,000
  13,704
  14,439
  15,209
  16,015
  16,859
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
  0
  2,587
  2,849
  3,123
  3,409
  3,707
  4,017
  4,340
  4,675
  5,023
  5,386
  5,762
  6,153
  6,560
  6,983
  7,423
  7,881
  8,358
  8,856
  9,374
  9,915
  10,480
  11,069
  11,685
  12,328
  13,000
  13,704
  14,439
  15,209
  16,015
  16,859
Operating income, $m
  0
  42
  46
  51
  55
  60
  65
  71
  76
  82
  88
  94
  100
  107
  114
  121
  128
  136
  144
  152
  161
  170
  180
  190
  200
  211
  223
  235
  247
  260
  274
EBITDA, $m
  700
  6,322
  6,962
  7,632
  8,330
  9,058
  9,816
  10,604
  11,424
  12,275
  13,160
  14,080
  15,035
  16,029
  17,063
  18,139
  19,258
  20,425
  21,640
  22,907
  24,229
  25,608
  27,049
  28,553
  30,125
  31,768
  33,486
  35,284
  37,165
  39,134
  41,196
Interest expense (income), $m
  1,150
  1,911
  1,907
  2,069
  2,238
  2,414
  2,598
  2,790
  2,989
  3,196
  3,411
  3,635
  3,867
  4,108
  4,359
  4,621
  4,892
  5,175
  5,470
  5,777
  6,097
  6,431
  6,780
  7,143
  7,523
  7,921
  8,336
  8,770
  9,224
  9,699
  10,197
Earnings before tax, $m
  21
  -1,869
  -1,860
  -2,018
  -2,182
  -2,354
  -2,533
  -2,719
  -2,913
  -3,114
  -3,323
  -3,541
  -3,767
  -4,002
  -4,246
  -4,500
  -4,764
  -5,039
  -5,326
  -5,625
  -5,936
  -6,261
  -6,600
  -6,953
  -7,323
  -7,709
  -8,113
  -8,535
  -8,977
  -9,439
  -9,923
Tax expense, $m
  204
  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
  -848
  -1,869
  -1,860
  -2,018
  -2,182
  -2,354
  -2,533
  -2,719
  -2,913
  -3,114
  -3,323
  -3,541
  -3,767
  -4,002
  -4,246
  -4,500
  -4,764
  -5,039
  -5,326
  -5,625
  -5,936
  -6,261
  -6,600
  -6,953
  -7,323
  -7,709
  -8,113
  -8,535
  -8,977
  -9,439
  -9,923

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  64,170
  32,864
  36,193
  39,674
  43,306
  47,091
  51,031
  55,128
  59,387
  63,814
  68,414
  73,194
  78,163
  83,329
  88,703
  94,295
  100,116
  106,180
  112,498
  119,085
  125,957
  133,127
  140,614
  148,434
  156,606
  165,148
  174,081
  183,426
  193,205
  203,442
  214,160
Adjusted assets (=assets-cash), $m
  64,170
  32,864
  36,193
  39,674
  43,306
  47,091
  51,031
  55,128
  59,387
  63,814
  68,414
  73,194
  78,163
  83,329
  88,703
  94,295
  100,116
  106,180
  112,498
  119,085
  125,957
  133,127
  140,614
  148,434
  156,606
  165,148
  174,081
  183,426
  193,205
  203,442
  214,160
Revenue / Adjusted assets
  0.000
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
Average production assets, $m
  347
  62,797
  69,158
  75,809
  82,749
  89,982
  97,509
  105,338
  113,477
  121,935
  130,725
  139,859
  149,354
  159,226
  169,494
  180,179
  191,303
  202,888
  214,961
  227,548
  240,678
  254,380
  268,685
  283,628
  299,242
  315,565
  332,634
  350,491
  369,177
  388,737
  409,218
Working capital, $m
  0
  -46,041
  -50,705
  -55,582
  -60,670
  -65,973
  -71,492
  -77,232
  -83,199
  -89,401
  -95,845
  -102,542
  -109,503
  -116,741
  -124,270
  -132,104
  -140,259
  -148,754
  -157,605
  -166,834
  -176,460
  -186,506
  -196,995
  -207,950
  -219,398
  -231,366
  -243,881
  -256,973
  -270,673
  -285,014
  -300,030
Total debt, $m
  14,936
  35,311
  38,307
  41,440
  44,709
  48,115
  51,661
  55,349
  59,182
  63,166
  67,306
  71,608
  76,080
  80,730
  85,566
  90,599
  95,838
  101,295
  106,982
  112,910
  119,094
  125,548
  132,286
  139,324
  146,678
  154,366
  162,406
  170,817
  179,618
  188,831
  198,478
Total liabilities, $m
  54,168
  29,578
  32,574
  35,707
  38,976
  42,382
  45,927
  49,615
  53,449
  57,432
  61,572
  65,875
  70,347
  74,996
  79,833
  84,866
  90,105
  95,562
  101,248
  107,177
  113,361
  119,815
  126,553
  133,591
  140,945
  148,633
  156,673
  165,084
  173,885
  183,098
  192,744
Total equity, $m
  10,003
  3,286
  3,619
  3,967
  4,331
  4,709
  5,103
  5,513
  5,939
  6,381
  6,841
  7,319
  7,816
  8,333
  8,870
  9,430
  10,012
  10,618
  11,250
  11,909
  12,596
  13,313
  14,061
  14,843
  15,661
  16,515
  17,408
  18,343
  19,321
  20,344
  21,416
Total liabilities and equity, $m
  64,171
  32,864
  36,193
  39,674
  43,307
  47,091
  51,030
  55,128
  59,388
  63,813
  68,413
  73,194
  78,163
  83,329
  88,703
  94,296
  100,117
  106,180
  112,498
  119,086
  125,957
  133,128
  140,614
  148,434
  156,606
  165,148
  174,081
  183,427
  193,206
  203,442
  214,160
Debt-to-equity ratio
  1.493
  10.740
  10.580
  10.450
  10.320
  10.220
  10.120
  10.040
  9.970
  9.900
  9.840
  9.780
  9.730
  9.690
  9.650
  9.610
  9.570
  9.540
  9.510
  9.480
  9.460
  9.430
  9.410
  9.390
  9.370
  9.350
  9.330
  9.310
  9.300
  9.280
  9.270
Adjusted equity ratio
  0.156
  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
  -848
  -1,869
  -1,860
  -2,018
  -2,182
  -2,354
  -2,533
  -2,719
  -2,913
  -3,114
  -3,323
  -3,541
  -3,767
  -4,002
  -4,246
  -4,500
  -4,764
  -5,039
  -5,326
  -5,625
  -5,936
  -6,261
  -6,600
  -6,953
  -7,323
  -7,709
  -8,113
  -8,535
  -8,977
  -9,439
  -9,923
Depreciation, amort., depletion, $m
  700
  6,280
  6,916
  7,581
  8,275
  8,998
  9,751
  10,534
  11,348
  12,194
  13,072
  13,986
  14,935
  15,923
  16,949
  18,018
  19,130
  20,289
  21,496
  22,755
  24,068
  25,438
  26,869
  28,363
  29,924
  31,556
  33,263
  35,049
  36,918
  38,874
  40,922
Funds from operations, $m
  3,379
  4,411
  5,055
  5,563
  6,093
  6,644
  7,218
  7,815
  8,435
  9,079
  9,749
  10,445
  11,169
  11,921
  12,704
  13,518
  14,366
  15,249
  16,170
  17,130
  18,132
  19,177
  20,269
  21,409
  22,601
  23,847
  25,150
  26,514
  27,941
  29,435
  30,999
Change in working capital, $m
  1,012
  -4,450
  -4,664
  -4,876
  -5,089
  -5,302
  -5,519
  -5,740
  -5,967
  -6,201
  -6,444
  -6,697
  -6,961
  -7,238
  -7,528
  -7,834
  -8,156
  -8,494
  -8,852
  -9,229
  -9,626
  -10,046
  -10,489
  -10,955
  -11,448
  -11,967
  -12,515
  -13,092
  -13,700
  -14,341
  -15,016
Cash from operations, $m
  2,367
  8,861
  9,719
  10,439
  11,181
  11,947
  12,737
  13,555
  14,402
  15,281
  16,193
  17,142
  18,130
  19,159
  20,232
  21,352
  22,522
  23,744
  25,022
  26,359
  27,758
  29,223
  30,757
  32,365
  34,049
  35,815
  37,665
  39,606
  41,641
  43,776
  46,015
Maintenance CAPEX, $m
  0
  -5,672
  -6,280
  -6,916
  -7,581
  -8,275
  -8,998
  -9,751
  -10,534
  -11,348
  -12,194
  -13,072
  -13,986
  -14,935
  -15,923
  -16,949
  -18,018
  -19,130
  -20,289
  -21,496
  -22,755
  -24,068
  -25,438
  -26,869
  -28,363
  -29,924
  -31,556
  -33,263
  -35,049
  -36,918
  -38,874
New CAPEX, $m
  -1,867
  -6,072
  -6,361
  -6,651
  -6,941
  -7,232
  -7,528
  -7,829
  -8,139
  -8,458
  -8,789
  -9,134
  -9,495
  -9,872
  -10,268
  -10,685
  -11,123
  -11,586
  -12,073
  -12,587
  -13,130
  -13,702
  -14,306
  -14,942
  -15,614
  -16,323
  -17,070
  -17,857
  -18,686
  -19,560
  -20,481
Cash from investing activities, $m
  -499
  -11,744
  -12,641
  -13,567
  -14,522
  -15,507
  -16,526
  -17,580
  -18,673
  -19,806
  -20,983
  -22,206
  -23,481
  -24,807
  -26,191
  -27,634
  -29,141
  -30,716
  -32,362
  -34,083
  -35,885
  -37,770
  -39,744
  -41,811
  -43,977
  -46,247
  -48,626
  -51,120
  -53,735
  -56,478
  -59,355
Free cash flow, $m
  1,868
  -2,884
  -2,922
  -3,127
  -3,340
  -3,560
  -3,789
  -4,025
  -4,271
  -4,525
  -4,790
  -5,065
  -5,351
  -5,649
  -5,959
  -6,282
  -6,620
  -6,972
  -7,340
  -7,724
  -8,126
  -8,546
  -8,986
  -9,446
  -9,928
  -10,432
  -10,961
  -11,514
  -12,094
  -12,702
  -13,339
Issuance/(repayment) of debt, $m
  -1,834
  -78
  2,996
  3,133
  3,269
  3,406
  3,546
  3,688
  3,833
  3,984
  4,140
  4,302
  4,472
  4,650
  4,836
  5,033
  5,239
  5,457
  5,686
  5,929
  6,184
  6,454
  6,738
  7,038
  7,354
  7,688
  8,040
  8,411
  8,801
  9,213
  9,646
Issuance/(repurchase) of shares, $m
  0
  5,242
  2,193
  2,366
  2,546
  2,732
  2,927
  3,129
  3,339
  3,557
  3,783
  4,019
  4,264
  4,518
  4,783
  5,059
  5,346
  5,646
  5,958
  6,283
  6,623
  6,978
  7,348
  7,735
  8,140
  8,563
  9,006
  9,470
  9,955
  10,463
  10,995
Cash from financing (excl. dividends), $m  
  -2,806
  5,164
  5,189
  5,499
  5,815
  6,138
  6,473
  6,817
  7,172
  7,541
  7,923
  8,321
  8,736
  9,168
  9,619
  10,092
  10,585
  11,103
  11,644
  12,212
  12,807
  13,432
  14,086
  14,773
  15,494
  16,251
  17,046
  17,881
  18,756
  19,676
  20,641
Total cash flow (excl. dividends), $m
  -972
  2,281
  2,268
  2,371
  2,474
  2,578
  2,684
  2,791
  2,902
  3,016
  3,134
  3,257
  3,385
  3,520
  3,661
  3,809
  3,966
  4,131
  4,304
  4,488
  4,681
  4,885
  5,100
  5,327
  5,567
  5,819
  6,086
  6,366
  6,662
  6,974
  7,302
Retained Cash Flow (-), $m
  942
  -5,242
  -2,193
  -2,366
  -2,546
  -2,732
  -2,927
  -3,129
  -3,339
  -3,557
  -3,783
  -4,019
  -4,264
  -4,518
  -4,783
  -5,059
  -5,346
  -5,646
  -5,958
  -6,283
  -6,623
  -6,978
  -7,348
  -7,735
  -8,140
  -8,563
  -9,006
  -9,470
  -9,955
  -10,463
  -10,995
Prev. year cash balance distribution, $m
 
  87
  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
 
  -2,875
  75
  5
  -71
  -154
  -243
  -338
  -437
  -541
  -650
  -762
  -879
  -999
  -1,122
  -1,250
  -1,381
  -1,515
  -1,653
  -1,796
  -1,942
  -2,093
  -2,248
  -2,408
  -2,573
  -2,744
  -2,921
  -3,103
  -3,293
  -3,489
  -3,693
Discount rate, %
 
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
 
  -2,483
  55
  3
  -36
  -64
  -81
  -88
  -88
  -82
  -73
  -61
  -50
  -39
  -29
  -21
  -15
  -10
  -6
  -4
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  30.0
  18.1
  11.0
  6.8
  4.2
  2.6
  1.6
  1.0
  0.6
  0.4
  0.3
  0.2
  0.1
  0.1
  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

CIT Group Inc. (CIT) is a bank holding company (BHC) and a financial holding company (FHC). The Company, together with its subsidiaries, provides financing, leasing and advisory services to middle market companies in a range of industries in North America. The Company's segments include Commercial Banking, Consumer Banking, Non-Strategic Portfolios, and Corporate and Other. The Commercial Banking segment consists of four divisions: Commercial Finance, Rail, Real Estate Finance, and Business Capital. The Consumer Banking segment includes Retail Banking, Mortgage Lending, and SBA Lending (together referred to as Other Consumer Banking), and Legacy Consumer Mortgages (LCM). The Company's products and services include account receivables collection, acquisition and expansion financing, asset management and servicing, asset-based loans, debt underwriting and syndication, deposits, enterprise value and cash flow loans, equipment leases, factoring services and financial risk management.

FINANCIAL RATIOS  of  CIT Group (CIT)

Valuation Ratios
P/E Ratio -12.4
Price to Sales 0
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 4.5
Price to Free Cash Flow 21.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -39.6%
Cap. Spend. - 3 Yr. Gr. Rate -2.1%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 126.1%
Total Debt to Equity 149.3%
Interest Coverage 1
Management Effectiveness
Return On Assets -16.5%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -3.2%
Ret/ On T. Cap. - 3 Yr. Avg. 1.5%
Return On Equity -8.1%
Return On Equity - 3 Yr. Avg. 4.9%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 971.4%
Eff/ Tax Rate - 3 Yr. Avg. 168.6%
Payout Ratio -14.5%

CIT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIT stock intrinsic value calculation we used $2375 million for the last fiscal year's total revenue generated by CIT Group. The default revenue input number comes from 2016 income statement of CIT Group. 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 CIT stock valuation model: a) initial revenue growth rate of 10.7% 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 15.8%, whose default value for CIT is calculated based on our internal credit rating of CIT Group, 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 CIT Group.
    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 CIT stock the variable cost ratio is equal to 98.4%.

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 CIT 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 5.4% for CIT Group.

Corporate tax rate of 27% is the nominal tax rate for CIT Group. 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 CIT 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 CIT are equal to 2388.5%.

Life of production assets of 10 years is the average useful life of capital assets used in CIT Group 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 CIT is equal to -1751.2%. 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 - $0 million for CIT Group - 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 162 million for CIT Group 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 CIT Group at the current share price and the inputted number of shares is $8.5 billion.

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COMPANY NEWS

▶ CIT Declares Increased Dividend   [Jul-17-18 01:10PM  PR Newswire]
▶ CIT Gives Back During Annual Volunteer Month   [Jul-12-18 10:00AM  PR Newswire]
▶ CIT to Announce Second Quarter 2018 Financial Results   [Jul-10-18 09:00AM  PR Newswire]
▶ CIT Expands Business Capital's Business Development Team   [Jun-26-18 09:00AM  PR Newswire]
▶ 3 Bank Stocks to Buy After the Feds Stress Tests   [Jun-22-18 10:45AM  InvestorPlace]
▶ CIT Adds Sponsor Finance Leader   [Jun-05-18 11:00AM  PR Newswire]
▶ CIT Kicks Off Nationwide Volunteer Month   [Jun-04-18 01:00PM  PR Newswire]
▶ CIT to Present at Morgan Stanley Financials Conference   [May-30-18 09:00AM  PR Newswire]
▶ [$$] Expect More Bank Mergers After Dodd-Frank Rollback   [May-26-18 12:01AM  Barrons.com]
▶ What You Should Know About CIT Group Incs (NYSE:CIT) Liquidity   [May-17-18 01:07PM  Simply Wall St.]
▶ [$$] CIT Is Lead Arranger on Financing for Onyx Renewable Partners   [May-07-18 01:02PM  The Wall Street Journal]
▶ CIT: 1Q Earnings Snapshot   [06:53AM  Associated Press]
▶ CIT Announces First Quarter 2018 Results   [06:30AM  PR Newswire]
▶ CIT Group Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ CIT Declares Dividends   [Apr-16-18 03:30PM  PR Newswire]
▶ CIT to Announce First Quarter 2018 Financial Results   [Apr-10-18 09:30AM  PR Newswire]
▶ 4 Bank Stocks to Outperform in 2018: Oppenheimer   [Mar-29-18 06:00AM  Investopedia]
▶ What Is CIT Group Incs (NYSE:CIT) Share Price Doing?   [Mar-18-18 05:10PM  Simply Wall St.]
▶ CIT Adds to Sales Team in Office Imaging   [11:00AM  PR Newswire]
▶ CIT Announces Vince Mollica as Equipment Finance Lead   [Feb-12-18 10:00AM  PR Newswire]
▶ CIT Arranges $180 Million in Financing for HCT Group   [Feb-08-18 09:00AM  PR Newswire]
▶ CIT Announces New Additions To Franchise Finance Team   [Jan-31-18 09:00AM  PR Newswire]
▶ CIT reports 4Q loss   [07:15AM  Associated Press]
▶ CIT Group Inc. to Host Earnings Call   [06:45AM  ACCESSWIRE]
▶ CIT Declares Common Dividend   [Jan-22-18 04:30PM  PR Newswire]
Financial statements of CIT
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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