Intrinsic value of Equity One - EQY

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$30.85

  Intrinsic Value

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  Value-price divergence*

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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
Adjusted assets (=assets-cash), $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
Revenue / Adjusted assets
  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
Adjusted equity ratio
  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
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
 
  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
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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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