# Intrinsic value of Equity One - EQY

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

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

We calculate the intrinsic value of EQY 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 ), \$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 4.4

## FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
(a)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

### INCOME STATEMENT

Revenue growth rate, %
-100.00
4.40
4.46
4.51
4.56
4.61
4.65
4.68
4.71
4.74
4.77
4.79
4.81
4.83
4.85
4.86
4.88
4.89
4.90
4.91
4.92
4.93
4.93
4.94
4.95
4.95
4.96
4.96
4.97
4.97
4.97
Revenue, \$m
0
376
393
410
429
449
470
492
515
539
565
592
620
650
682
715
750
787
825
866
908
953
1,000
1,050
1,101
1,156
1,213
1,274
1,337
1,403
1,473
Variable operating expenses, \$m

274
286
299
312
327
342
358
375
392
411
430
451
472
495
519
545
571
599
629
660
692
726
762
800
840
881
925
971
1,019
1,070
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
274
286
299
312
327
342
358
375
392
411
430
451
472
495
519
545
571
599
629
660
692
726
762
800
840
881
925
971
1,019
1,070
Operating income, \$m
0
102
107
112
117
122
128
134
140
147
154
162
170
178
187
196
205
215
226
237
249
261
274
287
301
316
332
349
366
384
403
EBITDA, \$m
0
210
220
230
240
251
263
275
288
302
316
331
347
364
382
400
420
440
462
485
509
534
560
588
617
647
679
713
748
786
825
Interest expense (income), \$m
0
57
61
65
68
72
76
81
86
90
96
101
107
113
119
126
133
140
148
156
165
174
183
193
204
215
226
238
251
265
279
Earnings before tax, \$m
0
45
46
47
49
50
51
53
55
57
58
61
63
65
67
70
72
75
78
81
84
87
90
94
98
102
106
110
115
119
124
Tax expense, \$m
0
12
12
13
13
13
14
14
15
15
16
16
17
18
18
19
20
20
21
22
23
23
24
25
26
27
29
30
31
32
34
Net income, \$m
0
33
33
34
35
36
38
39
40
41
43
44
46
48
49
51
53
55
57
59
61
64
66
69
71
74
77
80
84
87
91

### 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
0
3,513
3,669
3,835
4,010
4,194
4,389
4,595
4,811
5,040
5,280
5,533
5,799
6,079
6,374
6,684
7,010
7,352
7,713
8,091
8,489
8,907
9,347
9,809
10,294
10,804
11,339
11,902
12,493
13,114
13,766
0
3,513
3,669
3,835
4,010
4,194
4,389
4,595
4,811
5,040
5,280
5,533
5,799
6,079
6,374
6,684
7,010
7,352
7,713
8,091
8,489
8,907
9,347
9,809
10,294
10,804
11,339
11,902
12,493
13,114
13,766
0.000
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
0.107
Average production assets, \$m
0
3,227
3,370
3,523
3,683
3,853
4,032
4,221
4,420
4,629
4,850
5,082
5,327
5,584
5,855
6,140
6,439
6,754
7,085
7,433
7,798
8,182
8,586
9,010
9,456
9,924
10,416
10,933
11,476
12,046
12,645
Working capital, \$m
0
-22
-23
-24
-25
-26
-27
-29
-30
-31
-33
-34
-36
-38
-40
-41
-44
-46
-48
-50
-53
-55
-58
-61
-64
-67
-70
-74
-78
-81
-85
Total debt, \$m
0
1,452
1,536
1,626
1,720
1,820
1,925
2,036
2,153
2,276
2,406
2,543
2,686
2,838
2,997
3,164
3,340
3,525
3,720
3,924
4,139
4,365
4,602
4,852
5,114
5,389
5,678
5,982
6,301
6,636
6,988
Total liabilities, \$m
0
1,897
1,981
2,071
2,165
2,265
2,370
2,481
2,598
2,721
2,851
2,988
3,131
3,283
3,442
3,609
3,785
3,970
4,165
4,369
4,584
4,810
5,047
5,297
5,559
5,834
6,123
6,427
6,746
7,081
7,433
Total equity, \$m
0
1,616
1,688
1,764
1,844
1,929
2,019
2,114
2,213
2,318
2,429
2,545
2,668
2,796
2,932
3,074
3,224
3,382
3,548
3,722
3,905
4,097
4,300
4,512
4,735
4,970
5,216
5,475
5,747
6,032
6,332
Total liabilities and equity, \$m
0
3,513
3,669
3,835
4,009
4,194
4,389
4,595
4,811
5,039
5,280
5,533
5,799
6,079
6,374
6,683
7,009
7,352
7,713
8,091
8,489
8,907
9,347
9,809
10,294
10,804
11,339
11,902
12,493
13,113
13,765
Debt-to-equity ratio
0.000
0.900
0.910
0.920
0.930
0.940
0.950
0.960
0.970
0.980
0.990
1.000
1.010
1.010
1.020
1.030
1.040
1.040
1.050
1.050
1.060
1.070
1.070
1.080
1.080
1.080
1.090
1.090
1.100
1.100
1.100
0.000
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460
0.460

### CASH FLOW

Net income, \$m
0
33
33
34
35
36
38
39
40
41
43
44
46
48
49
51
53
55
57
59
61
64
66
69
71
74
77
80
84
87
91
Depreciation, amort., depletion, \$m
0
108
113
118
123
129
135
141
148
155
162
169
178
186
195
205
215
225
236
248
260
273
286
300
315
331
347
364
383
402
422
Funds from operations, \$m
0
141
146
152
159
166
173
180
188
196
205
214
224
234
244
256
267
280
293
307
321
336
352
369
386
405
424
445
466
489
512
Change in working capital, \$m
0
-1
-1
-1
-1
-1
-1
-1
-1
-1
-1
-2
-2
-2
-2
-2
-2
-2
-2
-2
-2
-3
-3
-3
-3
-3
-3
-3
-4
-4
-4
Cash from operations, \$m
0
218
147
153
160
167
174
181
189
198
206
215
225
235
246
258
269
282
295
309
324
339
355
372
390
408
428
448
470
493
516
Maintenance CAPEX, \$m
0
-103
-108
-112
-117
-123
-128
-134
-141
-147
-154
-162
-169
-178
-186
-195
-205
-215
-225
-236
-248
-260
-273
-286
-300
-315
-331
-347
-364
-383
-402
New CAPEX, \$m
0
-136
-144
-152
-161
-170
-179
-189
-199
-210
-221
-232
-245
-257
-271
-285
-299
-315
-331
-348
-366
-384
-404
-424
-446
-468
-492
-517
-543
-570
-599
Cash from investing activities, \$m
0
-239
-252
-264
-278
-293
-307
-323
-340
-357
-375
-394
-414
-435
-457
-480
-504
-530
-556
-584
-614
-644
-677
-710
-746
-783
-823
-864
-907
-953
-1,001
Free cash flow, \$m
0
-21
-104
-111
-118
-126
-134
-142
-150
-159
-169
-179
-189
-199
-211
-222
-235
-247
-261
-275
-290
-305
-322
-339
-357
-375
-395
-416
-437
-460
-484
Issuance/(repayment) of debt, \$m
0
85
85
89
94
100
105
111
117
123
130
137
144
151
159
167
176
185
195
204
215
226
237
249
262
275
289
304
319
335
352
Issuance/(repurchase) of shares, \$m
0
0
92
98
104
111
118
125
133
141
149
158
167
177
187
198
208
220
232
245
258
272
286
302
318
335
352
371
390
411
432
Cash from financing (excl. dividends), \$m
0
85
177
187
198
211
223
236
250
264
279
295
311
328
346
365
384
405
427
449
473
498
523
551
580
610
641
675
709
746
784
Total cash flow (excl. dividends), \$m
0
64
-19
-22
-24
-26
-28
-31
-33
-36
-39
-42
-45
-48
-51
-55
-59
-62
-66
-71
-75
-79
-84
-89
-95
-100
-106
-112
-118
-125
-132
Retained Cash Flow (-), \$m
0
-73
-72
-76
-80
-85
-90
-95
-100
-105
-111
-116
-122
-129
-136
-143
-150
-158
-166
-174
-183
-192
-202
-212
-223
-234
-246
-259
-272
-286
-300
Prev. year cash balance distribution, \$m

21
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
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

12
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
Discount rate, %

8.20
8.61
9.04
9.49
9.97
10.47
10.99
11.54
12.12
12.72
13.36
14.02
14.73
15.46
16.24
17.05
17.90
18.79
19.73
20.72
21.76
22.84
23.99
25.19
26.45
27.77
29.16
30.61
32.15
33.75
PV of cash for distribution, \$m

11
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
Current shareholders' claim on cash, %
100
100.0
98.0
96.0
94.1
92.1
90.1
88.2
86.3
84.4
82.5
80.6
78.8
76.9
75.2
73.4
71.7
70.0
68.3
66.7
65.1
63.5
62.0
60.5
59.0
57.5
56.1
54.7
53.4
52.1
50.8

Equity One, Inc is a real estate investment trust. The firm invests in the real estate markets of United States. It owns, manages, acquires, develops and redevelops shopping centers and retail properties. Equity One, Inc was formed in 1992 is based in the New York, New York with additional offices in New York City; Marietta, Georgia and Daly City, California. Equity One, Inc. operates as a subsidiary of Popular North America, Inc.

### FINANCIAL RATIOS  of  Equity One (EQY)

##### Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
##### Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
##### Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
##### Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
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 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

## EQY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EQY stock intrinsic value calculation we used \$360 million for the last fiscal year's total revenue generated by Equity One. The default revenue input number comes from income statement of Equity One. 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 EQY stock valuation model: a) initial revenue growth rate of 4.4% 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 8.2%, whose default value for EQY is calculated based on our internal credit rating of Equity One, 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 Equity One.
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 EQY stock the variable cost ratio is equal to 72.8%.

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 EQY 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 4.2% for Equity One.

Corporate tax rate of 27% is the nominal tax rate for Equity One. 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 EQY 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 EQY are equal to 858.5%.

Life of production assets of 32.3 years is the average useful life of capital assets used in Equity One 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 EQY is equal to -5.8%. 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 - \$1564 million for Equity One - 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 142.626 million for Equity One 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 Equity One at the current share price and the inputted number of shares is \$4.4 billion.

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Stock chart of EQY Financial statements of EQY

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