Intrinsic value of PBF Energy - PBF

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$22.32

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$22.32

 
Intrinsic value

$306.94

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence* premium content

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

We calculate the intrinsic value of PBF 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 2.5

 

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, %
  21.30
  41.30
  37.67
  34.40
  31.46
  28.82
  26.43
  24.29
  22.36
  20.63
  19.06
  17.66
  16.39
  15.25
  14.23
  13.30
  12.47
  11.73
  11.05
  10.45
  9.90
  9.41
  8.97
  8.57
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
Revenue, $m
  15,920
  22,495
  30,969
  41,623
  54,719
  70,487
  89,120
  110,768
  135,538
  163,494
  194,662
  229,033
  266,575
  307,233
  350,943
  397,634
  447,234
  499,679
  554,913
  612,892
  673,591
  736,997
  803,120
  871,985
  943,638
  1,018,143
  1,095,583
  1,176,058
  1,259,685
  1,346,601
  1,436,954
Variable operating expenses, $m
 
  21,393
  29,451
  39,583
  52,038
  67,033
  84,753
  105,340
  128,897
  155,483
  185,123
  217,811
  253,513
  292,179
  333,747
  378,150
  425,320
  475,195
  527,722
  582,860
  640,585
  700,884
  763,767
  829,258
  897,400
  968,254
  1,041,900
  1,118,431
  1,197,961
  1,280,617
  1,366,544
Fixed operating expenses, $m
 
  302
  310
  318
  326
  334
  342
  351
  359
  368
  378
  387
  397
  407
  417
  427
  438
  449
  460
  472
  483
  495
  508
  521
  534
  547
  561
  575
  589
  604
  619
Total operating expenses, $m
  15,422
  21,695
  29,761
  39,901
  52,364
  67,367
  85,095
  105,691
  129,256
  155,851
  185,501
  218,198
  253,910
  292,586
  334,164
  378,577
  425,758
  475,644
  528,182
  583,332
  641,068
  701,379
  764,275
  829,779
  897,934
  968,801
  1,042,461
  1,119,006
  1,198,550
  1,281,221
  1,367,163
Operating income, $m
  499
  800
  1,208
  1,722
  2,356
  3,120
  4,025
  5,077
  6,282
  7,643
  9,161
  10,836
  12,665
  14,648
  16,779
  19,057
  21,477
  24,035
  26,731
  29,560
  32,523
  35,617
  38,845
  42,207
  45,705
  49,342
  53,123
  57,052
  61,136
  65,380
  69,792
EBITDA, $m
  732
  1,130
  1,662
  2,333
  3,159
  4,155
  5,333
  6,703
  8,272
  10,043
  12,019
  14,198
  16,579
  19,159
  21,932
  24,895
  28,043
  31,372
  34,878
  38,559
  42,413
  46,438
  50,637
  55,010
  59,560
  64,291
  69,209
  74,320
  79,631
  85,151
  90,890
Interest expense (income), $m
  146
  154
  321
  537
  809
  1,143
  1,544
  2,019
  2,571
  3,202
  3,914
  4,709
  5,585
  6,541
  7,577
  8,691
  9,881
  11,145
  12,481
  13,889
  15,366
  16,913
  18,529
  20,214
  21,969
  23,795
  25,693
  27,667
  29,717
  31,848
  34,063
Earnings before tax, $m
  363
  646
  886
  1,184
  1,547
  1,977
  2,480
  3,058
  3,711
  4,441
  5,246
  6,127
  7,081
  8,107
  9,202
  10,366
  11,596
  12,890
  14,249
  15,671
  17,156
  18,704
  20,316
  21,993
  23,736
  25,548
  27,430
  29,386
  31,418
  33,531
  35,729
Tax expense, $m
  137
  174
  239
  320
  418
  534
  670
  826
  1,002
  1,199
  1,417
  1,654
  1,912
  2,189
  2,485
  2,799
  3,131
  3,480
  3,847
  4,231
  4,632
  5,050
  5,485
  5,938
  6,409
  6,898
  7,406
  7,934
  8,483
  9,053
  9,647
Net income, $m
  171
  472
  647
  865
  1,129
  1,444
  1,811
  2,232
  2,709
  3,242
  3,830
  4,473
  5,169
  5,918
  6,718
  7,567
  8,465
  9,410
  10,402
  11,440
  12,524
  13,654
  14,831
  16,055
  17,327
  18,650
  20,024
  21,452
  22,935
  24,478
  26,082

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  786
  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
  7,622
  9,659
  13,297
  17,872
  23,495
  30,265
  38,265
  47,560
  58,196
  70,199
  83,582
  98,340
  114,459
  131,916
  150,684
  170,732
  192,028
  214,547
  238,262
  263,157
  289,219
  316,444
  344,835
  374,403
  405,169
  437,159
  470,409
  504,963
  540,870
  578,188
  616,983
Adjusted assets (=assets-cash), $m
  6,836
  9,659
  13,297
  17,872
  23,495
  30,265
  38,265
  47,560
  58,196
  70,199
  83,582
  98,340
  114,459
  131,916
  150,684
  170,732
  192,028
  214,547
  238,262
  263,157
  289,219
  316,444
  344,835
  374,403
  405,169
  437,159
  470,409
  504,963
  540,870
  578,188
  616,983
Revenue / Adjusted assets
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
  2.329
Average production assets, $m
  2,939
  4,162
  5,729
  7,700
  10,123
  13,040
  16,487
  20,492
  25,075
  30,246
  36,012
  42,371
  49,316
  56,838
  64,925
  73,562
  82,738
  92,441
  102,659
  113,385
  124,614
  136,344
  148,577
  161,317
  174,573
  188,357
  202,683
  217,571
  233,042
  249,121
  265,837
Working capital, $m
  1,350
  855
  1,177
  1,582
  2,079
  2,678
  3,387
  4,209
  5,150
  6,213
  7,397
  8,703
  10,130
  11,675
  13,336
  15,110
  16,995
  18,988
  21,087
  23,290
  25,596
  28,006
  30,519
  33,135
  35,858
  38,689
  41,632
  44,690
  47,868
  51,171
  54,604
Total debt, $m
  2,148
  4,403
  7,361
  11,081
  15,652
  21,156
  27,661
  35,218
  43,864
  53,623
  64,503
  76,501
  89,606
  103,799
  119,057
  135,356
  152,670
  170,977
  190,258
  210,497
  231,686
  253,820
  276,902
  300,941
  325,953
  351,961
  378,994
  407,086
  436,278
  466,618
  498,159
Total liabilities, $m
  5,597
  7,852
  10,810
  14,530
  19,101
  24,605
  31,110
  38,667
  47,313
  57,072
  67,952
  79,950
  93,055
  107,248
  122,506
  138,805
  156,119
  174,426
  193,707
  213,946
  235,135
  257,269
  280,351
  304,390
  329,402
  355,410
  382,443
  410,535
  439,727
  470,067
  501,608
Total equity, $m
  2,025
  1,806
  2,487
  3,342
  4,393
  5,660
  7,156
  8,894
  10,883
  13,127
  15,630
  18,390
  21,404
  24,668
  28,178
  31,927
  35,909
  40,120
  44,555
  49,210
  54,084
  59,175
  64,484
  70,013
  75,767
  81,749
  87,967
  94,428
  101,143
  108,121
  115,376
Total liabilities and equity, $m
  7,622
  9,658
  13,297
  17,872
  23,494
  30,265
  38,266
  47,561
  58,196
  70,199
  83,582
  98,340
  114,459
  131,916
  150,684
  170,732
  192,028
  214,546
  238,262
  263,156
  289,219
  316,444
  344,835
  374,403
  405,169
  437,159
  470,410
  504,963
  540,870
  578,188
  616,984
Debt-to-equity ratio
  1.061
  2.440
  2.960
  3.320
  3.560
  3.740
  3.870
  3.960
  4.030
  4.080
  4.130
  4.160
  4.190
  4.210
  4.230
  4.240
  4.250
  4.260
  4.270
  4.280
  4.280
  4.290
  4.290
  4.300
  4.300
  4.310
  4.310
  4.310
  4.310
  4.320
  4.320
Adjusted equity ratio
  0.181
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187
  0.187

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  171
  472
  647
  865
  1,129
  1,444
  1,811
  2,232
  2,709
  3,242
  3,830
  4,473
  5,169
  5,918
  6,718
  7,567
  8,465
  9,410
  10,402
  11,440
  12,524
  13,654
  14,831
  16,055
  17,327
  18,650
  20,024
  21,452
  22,935
  24,478
  26,082
Depreciation, amort., depletion, $m
  233
  330
  455
  611
  803
  1,035
  1,309
  1,626
  1,990
  2,401
  2,858
  3,363
  3,914
  4,511
  5,153
  5,838
  6,567
  7,337
  8,148
  8,999
  9,890
  10,821
  11,792
  12,803
  13,855
  14,949
  16,086
  17,268
  18,495
  19,772
  21,098
Funds from operations, $m
  1,035
  802
  1,102
  1,476
  1,933
  2,478
  3,119
  3,859
  4,699
  5,642
  6,688
  7,835
  9,083
  10,429
  11,870
  13,405
  15,031
  16,747
  18,549
  20,439
  22,414
  24,475
  26,623
  28,858
  31,182
  33,599
  36,110
  38,719
  41,431
  44,249
  47,180
Change in working capital, $m
  383
  250
  322
  405
  498
  599
  708
  823
  941
  1,062
  1,184
  1,306
  1,427
  1,545
  1,661
  1,774
  1,885
  1,993
  2,099
  2,203
  2,307
  2,409
  2,513
  2,617
  2,723
  2,831
  2,943
  3,058
  3,178
  3,303
  3,433
Cash from operations, $m
  652
  1,057
  780
  1,071
  1,435
  1,879
  2,411
  3,036
  3,758
  4,580
  5,504
  6,529
  7,656
  8,884
  10,209
  11,631
  13,146
  14,754
  16,451
  18,236
  20,108
  22,066
  24,110
  26,241
  28,459
  30,767
  33,167
  35,661
  38,253
  40,947
  43,747
Maintenance CAPEX, $m
  0
  -233
  -330
  -455
  -611
  -803
  -1,035
  -1,309
  -1,626
  -1,990
  -2,401
  -2,858
  -3,363
  -3,914
  -4,511
  -5,153
  -5,838
  -6,567
  -7,337
  -8,148
  -8,999
  -9,890
  -10,821
  -11,792
  -12,803
  -13,855
  -14,949
  -16,086
  -17,268
  -18,495
  -19,772
New CAPEX, $m
  -540
  -1,223
  -1,568
  -1,971
  -2,423
  -2,917
  -3,447
  -4,005
  -4,582
  -5,172
  -5,766
  -6,359
  -6,945
  -7,522
  -8,086
  -8,638
  -9,176
  -9,702
  -10,218
  -10,726
  -11,229
  -11,730
  -12,233
  -12,740
  -13,256
  -13,783
  -14,326
  -14,888
  -15,471
  -16,079
  -16,715
Cash from investing activities, $m
  -1,394
  -1,456
  -1,898
  -2,426
  -3,034
  -3,720
  -4,482
  -5,314
  -6,208
  -7,162
  -8,167
  -9,217
  -10,308
  -11,436
  -12,597
  -13,791
  -15,014
  -16,269
  -17,555
  -18,874
  -20,228
  -21,620
  -23,054
  -24,532
  -26,059
  -27,638
  -29,275
  -30,974
  -32,739
  -34,574
  -36,487
Free cash flow, $m
  -742
  -399
  -1,118
  -1,355
  -1,599
  -1,841
  -2,071
  -2,278
  -2,451
  -2,582
  -2,663
  -2,688
  -2,652
  -2,552
  -2,388
  -2,160
  -1,868
  -1,515
  -1,104
  -638
  -120
  445
  1,056
  1,709
  2,401
  3,129
  3,892
  4,687
  5,514
  6,372
  7,260
Issuance/(repayment) of debt, $m
  303
  2,295
  2,958
  3,719
  4,571
  5,504
  6,504
  7,557
  8,647
  9,759
  10,880
  11,998
  13,105
  14,193
  15,258
  16,299
  17,314
  18,307
  19,281
  20,239
  21,188
  22,134
  23,082
  24,039
  25,012
  26,008
  27,032
  28,092
  29,192
  30,340
  31,540
Issuance/(repurchase) of shares, $m
  413
  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  
  716
  2,295
  2,958
  3,719
  4,571
  5,504
  6,504
  7,557
  8,647
  9,759
  10,880
  11,998
  13,105
  14,193
  15,258
  16,299
  17,314
  18,307
  19,281
  20,239
  21,188
  22,134
  23,082
  24,039
  25,012
  26,008
  27,032
  28,092
  29,192
  30,340
  31,540
Total cash flow (excl. dividends), $m
  -26
  1,897
  1,840
  2,364
  2,972
  3,663
  4,433
  5,279
  6,196
  7,177
  8,217
  9,311
  10,453
  11,641
  12,870
  14,139
  15,446
  16,792
  18,177
  19,601
  21,068
  22,579
  24,138
  25,748
  27,413
  29,137
  30,924
  32,779
  34,707
  36,712
  38,800
Retained Cash Flow (-), $m
  -378
  -527
  -680
  -855
  -1,051
  -1,266
  -1,496
  -1,738
  -1,989
  -2,245
  -2,503
  -2,760
  -3,014
  -3,265
  -3,510
  -3,749
  -3,983
  -4,211
  -4,435
  -4,655
  -4,874
  -5,091
  -5,309
  -5,529
  -5,753
  -5,982
  -6,218
  -6,461
  -6,715
  -6,979
  -7,255
Prev. year cash balance distribution, $m
 
  746
  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
 
  2,115
  1,159
  1,509
  1,921
  2,397
  2,937
  3,541
  4,207
  4,932
  5,714
  6,551
  7,439
  8,376
  9,361
  10,390
  11,464
  12,581
  13,742
  14,946
  16,194
  17,488
  18,829
  20,219
  21,660
  23,155
  24,706
  26,318
  27,992
  29,733
  31,546
Discount rate, %
 
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
 
  1,983
  1,012
  1,218
  1,425
  1,621
  1,795
  1,940
  2,046
  2,109
  2,126
  2,096
  2,024
  1,912
  1,770
  1,604
  1,423
  1,236
  1,050
  873
  709
  563
  436
  330
  243
  174
  121
  82
  54
  34
  21
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

PBF Energy Inc., together with its subsidiaries, engages in the refining and supply of petroleum products. It produces gasoline, ultra-low-sulfur diesel, heating oil, diesel fuel, jet fuel, lubricants, petrochemicals, and asphalt, as well as unbranded transportation fuels, petrochemical feedstocks, blending components, and other petroleum products. The company sells its products in Northeast and Midwest of the United States, as well as in other regions of the United States and Canada. PBF Energy Inc. was founded in 2008 and is based in Parsippany, New Jersey.

FINANCIAL RATIOS  of  PBF Energy (PBF)

Valuation Ratios
P/E Ratio 14.3
Price to Sales 0.2
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 3.7
Price to Free Cash Flow 21.8
Growth Rates
Sales Growth Rate 21.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 29.8%
Cap. Spend. - 3 Yr. Gr. Rate 5.4%
Financial Strength
Quick Ratio 20
Current Ratio 0
LT Debt to Equity 104.1%
Total Debt to Equity 106.1%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital 4.5%
Ret/ On T. Cap. - 3 Yr. Avg. 2.5%
Return On Equity 9.3%
Return On Equity - 3 Yr. Avg. 5.1%
Asset Turnover 2.3
Profitability Ratios
Gross Margin 14.9%
Gross Margin - 3 Yr. Avg. 11.1%
EBITDA Margin 4.7%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin 3.1%
Oper. Margin - 3 Yr. Avg. 2.2%
Pre-Tax Margin 2.3%
Pre-Tax Margin - 3 Yr. Avg. 1.6%
Net Profit Margin 1.1%
Net Profit Margin - 3 Yr. Avg. 0.7%
Effective Tax Rate 37.7%
Eff/ Tax Rate - 3 Yr. Avg. 9.7%
Payout Ratio 100.6%

PBF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PBF stock intrinsic value calculation we used $15920 million for the last fiscal year's total revenue generated by PBF Energy. The default revenue input number comes from 2016 income statement of PBF Energy. 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 PBF stock valuation model: a) initial revenue growth rate of 41.3% 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 6.7%, whose default value for PBF is calculated based on our internal credit rating of PBF Energy, 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 PBF Energy.
    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 PBF stock the variable cost ratio is equal to 95.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $295 million in the base year in the intrinsic value calculation for PBF 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 7.3% for PBF Energy.

Corporate tax rate of 27% is the nominal tax rate for PBF Energy. 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 PBF 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 PBF are equal to 18.5%.

Life of production assets of 12.6 years is the average useful life of capital assets used in PBF Energy 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 PBF is equal to 3.8%. 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 - $2025 million for PBF Energy - 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 110.961 million for PBF Energy 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 PBF Energy at the current share price and the inputted number of shares is $2.5 billion.


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Stock chart of PBF Financial statements of PBF
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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