Intrinsic value of Constellation Brands Cl A - STZ

Previous Close

$216.29

  Intrinsic Value

$99.41

stock screener

  Rating & Target

str. sell

-54%

Previous close

$216.29

 
Intrinsic value

$99.41

 
Up/down potential

-54%

 
Rating

str. sell

We calculate the intrinsic value of STZ 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 2017), $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 42.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.97
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
Revenue, $m
  7,332
  7,567
  7,822
  8,099
  8,398
  8,719
  9,062
  9,429
  9,819
  10,234
  10,674
  11,141
  11,635
  12,157
  12,710
  13,293
  13,908
  14,557
  15,241
  15,962
  16,722
  17,521
  18,363
  19,248
  20,180
  21,160
  22,190
  23,274
  24,414
  25,611
  26,870
Variable operating expenses, $m
 
  1,405
  1,425
  1,448
  1,472
  1,498
  1,526
  1,555
  1,587
  1,621
  1,656
  902
  942
  984
  1,029
  1,076
  1,126
  1,179
  1,234
  1,292
  1,354
  1,419
  1,487
  1,558
  1,634
  1,713
  1,797
  1,884
  1,977
  2,074
  2,176
Fixed operating expenses, $m
 
  3,728
  3,821
  3,917
  4,015
  4,115
  4,218
  4,323
  4,431
  4,542
  4,656
  4,772
  4,891
  5,014
  5,139
  5,267
  5,399
  5,534
  5,672
  5,814
  5,960
  6,109
  6,261
  6,418
  6,578
  6,743
  6,911
  7,084
  7,261
  7,443
  7,629
Total operating expenses, $m
  4,932
  5,133
  5,246
  5,365
  5,487
  5,613
  5,744
  5,878
  6,018
  6,163
  6,312
  5,674
  5,833
  5,998
  6,168
  6,343
  6,525
  6,713
  6,906
  7,106
  7,314
  7,528
  7,748
  7,976
  8,212
  8,456
  8,708
  8,968
  9,238
  9,517
  9,805
Operating income, $m
  2,399
  2,434
  2,576
  2,735
  2,911
  3,106
  3,318
  3,550
  3,800
  4,071
  4,362
  5,467
  5,801
  6,159
  6,542
  6,949
  7,383
  7,844
  8,335
  8,856
  9,408
  9,994
  10,614
  11,272
  11,968
  12,704
  13,482
  14,306
  15,176
  16,095
  17,066
EBITDA, $m
  2,693
  3,468
  3,618
  3,786
  3,972
  4,176
  4,400
  4,643
  4,906
  5,190
  5,495
  5,822
  6,173
  6,548
  6,947
  7,374
  7,827
  8,309
  8,822
  9,365
  9,942
  10,553
  11,201
  11,886
  12,612
  13,380
  14,191
  15,049
  15,955
  16,913
  17,924
Interest expense (income), $m
  300
  317
  330
  344
  359
  376
  393
  412
  432
  454
  477
  501
  527
  554
  583
  613
  645
  679
  715
  752
  792
  834
  878
  924
  973
  1,024
  1,078
  1,135
  1,195
  1,257
  1,323
Earnings before tax, $m
  2,093
  2,117
  2,246
  2,391
  2,552
  2,730
  2,925
  3,137
  3,368
  3,617
  3,885
  4,966
  5,275
  5,605
  5,959
  6,336
  6,738
  7,165
  7,620
  8,103
  8,616
  9,160
  9,736
  10,347
  10,995
  11,679
  12,404
  13,171
  13,981
  14,837
  15,742
Tax expense, $m
  554
  572
  606
  646
  689
  737
  790
  847
  909
  977
  1,049
  1,341
  1,424
  1,513
  1,609
  1,711
  1,819
  1,935
  2,057
  2,188
  2,326
  2,473
  2,629
  2,794
  2,969
  3,153
  3,349
  3,556
  3,775
  4,006
  4,250
Net income, $m
  1,535
  1,545
  1,639
  1,745
  1,863
  1,993
  2,135
  2,290
  2,459
  2,640
  2,836
  3,625
  3,851
  4,092
  4,350
  4,625
  4,919
  5,231
  5,563
  5,915
  6,290
  6,687
  7,108
  7,554
  8,026
  8,526
  9,055
  9,615
  10,206
  10,831
  11,492

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  184
  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
  18,602
  19,012
  19,654
  20,350
  21,101
  21,907
  22,769
  23,690
  24,670
  25,713
  26,819
  27,992
  29,233
  30,546
  31,934
  33,399
  34,945
  36,576
  38,295
  40,106
  42,014
  44,023
  46,137
  48,362
  50,703
  53,165
  55,755
  58,478
  61,341
  64,350
  67,513
Adjusted assets (=assets-cash), $m
  18,418
  19,012
  19,654
  20,350
  21,101
  21,907
  22,769
  23,690
  24,670
  25,713
  26,819
  27,992
  29,233
  30,546
  31,934
  33,399
  34,945
  36,576
  38,295
  40,106
  42,014
  44,023
  46,137
  48,362
  50,703
  53,165
  55,755
  58,478
  61,341
  64,350
  67,513
Revenue / Adjusted assets
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
  0.398
Average production assets, $m
  7,025
  7,249
  7,494
  7,759
  8,045
  8,353
  8,682
  9,033
  9,406
  9,804
  10,226
  10,673
  11,146
  11,647
  12,176
  12,734
  13,324
  13,946
  14,601
  15,292
  16,019
  16,785
  17,591
  18,440
  19,332
  20,271
  21,258
  22,297
  23,388
  24,536
  25,742
Working capital, $m
  532
  1,929
  1,995
  2,065
  2,142
  2,223
  2,311
  2,404
  2,504
  2,610
  2,722
  2,841
  2,967
  3,100
  3,241
  3,390
  3,547
  3,712
  3,887
  4,070
  4,264
  4,468
  4,682
  4,908
  5,146
  5,396
  5,659
  5,935
  6,225
  6,531
  6,852
Total debt, $m
  9,238
  9,428
  9,831
  10,266
  10,736
  11,241
  11,781
  12,357
  12,971
  13,623
  14,316
  15,050
  15,827
  16,649
  17,518
  18,435
  19,403
  20,423
  21,500
  22,633
  23,828
  25,085
  26,409
  27,802
  29,267
  30,809
  32,430
  34,134
  35,926
  37,810
  39,790
Total liabilities, $m
  11,711
  11,901
  12,304
  12,739
  13,209
  13,714
  14,254
  14,830
  15,444
  16,096
  16,789
  17,523
  18,300
  19,122
  19,991
  20,908
  21,876
  22,896
  23,973
  25,106
  26,301
  27,558
  28,882
  30,275
  31,740
  33,282
  34,903
  36,607
  38,399
  40,283
  42,263
Total equity, $m
  6,891
  7,110
  7,351
  7,611
  7,892
  8,193
  8,516
  8,860
  9,227
  9,617
  10,030
  10,469
  10,933
  11,424
  11,943
  12,491
  13,069
  13,679
  14,322
  15,000
  15,713
  16,464
  17,255
  18,087
  18,963
  19,884
  20,852
  21,871
  22,941
  24,067
  25,250
Total liabilities and equity, $m
  18,602
  19,011
  19,655
  20,350
  21,101
  21,907
  22,770
  23,690
  24,671
  25,713
  26,819
  27,992
  29,233
  30,546
  31,934
  33,399
  34,945
  36,575
  38,295
  40,106
  42,014
  44,022
  46,137
  48,362
  50,703
  53,166
  55,755
  58,478
  61,340
  64,350
  67,513
Debt-to-equity ratio
  1.341
  1.330
  1.340
  1.350
  1.360
  1.370
  1.380
  1.390
  1.410
  1.420
  1.430
  1.440
  1.450
  1.460
  1.470
  1.480
  1.480
  1.490
  1.500
  1.510
  1.520
  1.520
  1.530
  1.540
  1.540
  1.550
  1.560
  1.560
  1.570
  1.570
  1.580
Adjusted equity ratio
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374
  0.374

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,535
  1,545
  1,639
  1,745
  1,863
  1,993
  2,135
  2,290
  2,459
  2,640
  2,836
  3,625
  3,851
  4,092
  4,350
  4,625
  4,919
  5,231
  5,563
  5,915
  6,290
  6,687
  7,108
  7,554
  8,026
  8,526
  9,055
  9,615
  10,206
  10,831
  11,492
Depreciation, amort., depletion, $m
  294
  1,034
  1,042
  1,051
  1,060
  1,071
  1,081
  1,093
  1,106
  1,119
  1,133
  356
  372
  388
  406
  424
  444
  465
  487
  510
  534
  560
  586
  615
  644
  676
  709
  743
  780
  818
  858
Funds from operations, $m
  1,624
  2,579
  2,681
  2,796
  2,923
  3,064
  3,217
  3,384
  3,564
  3,759
  3,969
  3,981
  4,222
  4,480
  4,756
  5,050
  5,363
  5,696
  6,049
  6,425
  6,824
  7,246
  7,694
  8,168
  8,670
  9,202
  9,764
  10,358
  10,986
  11,649
  12,350
Change in working capital, $m
  -72
  60
  65
  71
  76
  82
  88
  93
  100
  106
  112
  119
  126
  133
  141
  149
  157
  165
  174
  184
  194
  204
  215
  226
  238
  250
  263
  276
  291
  305
  321
Cash from operations, $m
  1,696
  2,519
  2,616
  2,725
  2,847
  2,982
  3,129
  3,290
  3,465
  3,653
  3,857
  3,862
  4,096
  4,347
  4,615
  4,901
  5,206
  5,530
  5,875
  6,241
  6,630
  7,042
  7,479
  7,942
  8,433
  8,952
  9,501
  10,081
  10,695
  11,344
  12,029
Maintenance CAPEX, $m
  0
  -234
  -242
  -250
  -259
  -268
  -278
  -289
  -301
  -314
  -327
  -341
  -356
  -372
  -388
  -406
  -424
  -444
  -465
  -487
  -510
  -534
  -560
  -586
  -615
  -644
  -676
  -709
  -743
  -780
  -818
New CAPEX, $m
  -907
  -224
  -245
  -265
  -286
  -307
  -329
  -351
  -374
  -397
  -422
  -447
  -473
  -501
  -529
  -559
  -590
  -622
  -655
  -691
  -727
  -766
  -806
  -848
  -893
  -939
  -987
  -1,038
  -1,091
  -1,147
  -1,206
Cash from investing activities, $m
  -1,462
  -458
  -487
  -515
  -545
  -575
  -607
  -640
  -675
  -711
  -749
  -788
  -829
  -873
  -917
  -965
  -1,014
  -1,066
  -1,120
  -1,178
  -1,237
  -1,300
  -1,366
  -1,434
  -1,508
  -1,583
  -1,663
  -1,747
  -1,834
  -1,927
  -2,024
Free cash flow, $m
  234
  2,061
  2,129
  2,210
  2,302
  2,406
  2,522
  2,650
  2,790
  2,942
  3,108
  3,074
  3,267
  3,475
  3,698
  3,936
  4,192
  4,464
  4,755
  5,064
  5,393
  5,742
  6,114
  6,508
  6,926
  7,369
  7,838
  8,335
  8,860
  9,417
  10,005
Issuance/(repayment) of debt, $m
  1,191
  374
  402
  436
  470
  504
  540
  576
  614
  653
  693
  734
  777
  822
  869
  917
  968
  1,021
  1,076
  1,134
  1,194
  1,257
  1,324
  1,393
  1,465
  1,541
  1,621
  1,705
  1,792
  1,884
  1,980
Issuance/(repurchase) of shares, $m
  -1,063
  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  
  180
  374
  402
  436
  470
  504
  540
  576
  614
  653
  693
  734
  777
  822
  869
  917
  968
  1,021
  1,076
  1,134
  1,194
  1,257
  1,324
  1,393
  1,465
  1,541
  1,621
  1,705
  1,792
  1,884
  1,980
Total cash flow (excl. dividends), $m
  409
  2,435
  2,532
  2,646
  2,772
  2,911
  3,062
  3,226
  3,404
  3,595
  3,801
  3,808
  4,044
  4,297
  4,566
  4,854
  5,160
  5,485
  5,831
  6,198
  6,587
  7,000
  7,437
  7,901
  8,391
  8,910
  9,459
  10,039
  10,652
  11,301
  11,985
Retained Cash Flow (-), $m
  -331
  -219
  -240
  -260
  -281
  -301
  -323
  -344
  -367
  -390
  -414
  -439
  -464
  -491
  -519
  -548
  -578
  -610
  -643
  -677
  -714
  -751
  -791
  -832
  -876
  -921
  -968
  -1,018
  -1,071
  -1,125
  -1,183
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
 
  2,216
  2,291
  2,386
  2,492
  2,609
  2,739
  2,882
  3,037
  3,205
  3,387
  3,369
  3,580
  3,806
  4,047
  4,306
  4,581
  4,875
  5,188
  5,520
  5,874
  6,249
  6,647
  7,068
  7,516
  7,989
  8,490
  9,021
  9,582
  10,175
  10,802
Discount rate, %
 
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
 
  2,040
  1,928
  1,818
  1,705
  1,587
  1,466
  1,343
  1,218
  1,092
  968
  797
  690
  588
  494
  407
  330
  262
  203
  155
  115
  83
  59
  41
  27
  18
  11
  7
  4
  2
  1
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

Constellation Brands, Inc. is an international beverage alcohol company. The Company is a producer and marketer of beer, wine and spirits with operations in the United States, Canada, Mexico, New Zealand and Italy. Its segments include Beer, Wine and Spirits, and Corporate Operations and Other. It is a multi-category supplier (beer, wine and spirits) of beverage alcohol in the United States. It sells a number of brands in the import and craft beer categories, including Corona Extra, Corona Light, Modelo Especial, Ballast Point and others. It is a producer and marketer of wine, and sells a number of wine brands across various categories, including table wine, sparkling wine and dessert wine, and across all price points, such as popular, premium and luxury categories. Some of its wine and spirits brands sold in the United States, which comprise its U.S. Focus Brands (Focus Brands) include Meiomi, Robert Mondavi, Wild Horse and others.

FINANCIAL RATIOS  of  Constellation Brands Cl A (STZ)

Valuation Ratios
P/E Ratio 27.4
Price to Sales 5.7
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow 24.8
Price to Free Cash Flow 53.3
Growth Rates
Sales Growth Rate 12%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1.8%
Cap. Spend. - 3 Yr. Gr. Rate 32.3%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 112%
Total Debt to Equity 134.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 9.9%
Ret/ On Assets - 3 Yr. Avg. 8.4%
Return On Total Capital 10%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity 22.8%
Return On Equity - 3 Yr. Avg. 18.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 48.1%
Gross Margin - 3 Yr. Avg. 46%
EBITDA Margin 36.6%
EBITDA Margin - 3 Yr. Avg. 32%
Operating Margin 32.7%
Oper. Margin - 3 Yr. Avg. 28.2%
Pre-Tax Margin 28.5%
Pre-Tax Margin - 3 Yr. Avg. 23.7%
Net Profit Margin 20.9%
Net Profit Margin - 3 Yr. Avg. 17%
Effective Tax Rate 26.5%
Eff/ Tax Rate - 3 Yr. Avg. 28.3%
Payout Ratio 20.5%

STZ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STZ stock intrinsic value calculation we used $7332 million for the last fiscal year's total revenue generated by Constellation Brands Cl A. The default revenue input number comes from 2017 income statement of Constellation Brands Cl A. 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 STZ stock valuation model: a) initial revenue growth rate of 3.2% 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 8.6%, whose default value for STZ is calculated based on our internal credit rating of Constellation Brands Cl A, 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 Constellation Brands Cl A.
    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 STZ stock the variable cost ratio is equal to 18.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3637 million in the base year in the intrinsic value calculation for STZ 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 3.5% for Constellation Brands Cl A.

Corporate tax rate of 27% is the nominal tax rate for Constellation Brands Cl A. 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 STZ 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 STZ are equal to 95.8%.

Life of production assets of 49.5 years is the average useful life of capital assets used in Constellation Brands Cl A 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 STZ is equal to 25.5%. 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 - $6891 million for Constellation Brands Cl A - 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 195.74 million for Constellation Brands Cl A 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 Constellation Brands Cl A at the current share price and the inputted number of shares is $42.3 billion.

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Financial statements of STZ
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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