Intrinsic value of Constellation Brands Cl A - STZ

Previous Close

$201.02

  Intrinsic Value

$100.56

stock screener

  Rating & Target

sell

-50%

  Value-price divergence*

-54%

Previous close

$201.02

 
Intrinsic value

$100.56

 
Up/down potential

-50%

 
Rating

sell

 
Value-price divergence*

-54%

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

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 39.5

 

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
  3.40
  3.56
  3.70
  3.83
  3.95
  4.06
  4.15
  4.23
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.82
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
Revenue, $m
  7,332
  7,581
  7,851
  8,142
  8,454
  8,788
  9,144
  9,524
  9,927
  10,355
  10,809
  11,289
  11,797
  12,333
  12,900
  13,497
  14,128
  14,792
  15,493
  16,230
  17,006
  17,824
  18,684
  19,588
  20,540
  21,541
  22,593
  23,699
  24,862
  26,085
  27,369
Variable operating expenses, $m
 
  1,406
  1,428
  1,451
  1,477
  1,504
  1,532
  1,563
  1,596
  1,631
  1,667
  914
  955
  999
  1,044
  1,093
  1,144
  1,198
  1,254
  1,314
  1,377
  1,443
  1,513
  1,586
  1,663
  1,744
  1,829
  1,919
  2,013
  2,112
  2,216
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
  5,134
  5,249
  5,368
  5,492
  5,619
  5,750
  5,886
  6,027
  6,173
  6,323
  5,686
  5,846
  6,013
  6,183
  6,360
  6,543
  6,732
  6,926
  7,128
  7,337
  7,552
  7,774
  8,004
  8,241
  8,487
  8,740
  9,003
  9,274
  9,555
  9,845
Operating income, $m
  2,399
  2,447
  2,602
  2,774
  2,963
  3,170
  3,394
  3,637
  3,900
  4,183
  4,486
  5,603
  5,950
  6,321
  6,716
  7,137
  7,585
  8,061
  8,566
  9,102
  9,670
  10,272
  10,910
  11,584
  12,299
  13,054
  13,852
  14,696
  15,588
  16,530
  17,524
EBITDA, $m
  2,693
  3,482
  3,645
  3,826
  4,025
  4,242
  4,478
  4,734
  5,009
  5,305
  5,623
  5,963
  6,327
  6,715
  7,128
  7,568
  8,036
  8,533
  9,060
  9,620
  10,213
  10,841
  11,506
  12,210
  12,955
  13,742
  14,574
  15,453
  16,382
  17,363
  18,398
Interest expense (income), $m
  300
  317
  331
  346
  362
  379
  397
  417
  438
  460
  484
  508
  535
  563
  592
  624
  656
  691
  728
  766
  807
  850
  895
  942
  992
  1,044
  1,099
  1,157
  1,218
  1,282
  1,349
Earnings before tax, $m
  2,093
  2,131
  2,271
  2,428
  2,601
  2,791
  2,997
  3,221
  3,462
  3,723
  4,002
  5,094
  5,415
  5,758
  6,124
  6,514
  6,928
  7,369
  7,838
  8,335
  8,863
  9,422
  10,015
  10,642
  11,307
  12,010
  12,753
  13,539
  14,370
  15,248
  16,175
Tax expense, $m
  554
  575
  613
  656
  702
  753
  809
  870
  935
  1,005
  1,081
  1,375
  1,462
  1,555
  1,653
  1,759
  1,871
  1,990
  2,116
  2,251
  2,393
  2,544
  2,704
  2,873
  3,053
  3,243
  3,443
  3,656
  3,880
  4,117
  4,367
Net income, $m
  1,535
  1,555
  1,658
  1,773
  1,899
  2,037
  2,188
  2,351
  2,527
  2,718
  2,922
  3,719
  3,953
  4,203
  4,470
  4,755
  5,058
  5,380
  5,722
  6,085
  6,470
  6,878
  7,311
  7,769
  8,254
  8,767
  9,310
  9,884
  10,490
  11,131
  11,808

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
  19,048
  19,727
  20,457
  21,242
  22,081
  22,976
  23,929
  24,943
  26,018
  27,158
  28,364
  29,640
  30,988
  32,411
  33,913
  35,497
  37,167
  38,926
  40,779
  42,730
  44,783
  46,944
  49,217
  51,608
  54,123
  56,767
  59,546
  62,468
  65,539
  68,767
Adjusted assets (=assets-cash), $m
  18,418
  19,048
  19,727
  20,457
  21,242
  22,081
  22,976
  23,929
  24,943
  26,018
  27,158
  28,364
  29,640
  30,988
  32,411
  33,913
  35,497
  37,167
  38,926
  40,779
  42,730
  44,783
  46,944
  49,217
  51,608
  54,123
  56,767
  59,546
  62,468
  65,539
  68,767
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
  7,263
  7,521
  7,800
  8,099
  8,419
  8,760
  9,124
  9,510
  9,920
  10,355
  10,815
  11,301
  11,815
  12,358
  12,931
  13,535
  14,171
  14,842
  15,548
  16,292
  17,075
  17,899
  18,766
  19,677
  20,636
  21,644
  22,704
  23,818
  24,989
  26,220
Working capital, $m
  532
  1,933
  2,002
  2,076
  2,156
  2,241
  2,332
  2,429
  2,531
  2,641
  2,756
  2,879
  3,008
  3,145
  3,289
  3,442
  3,603
  3,772
  3,951
  4,139
  4,337
  4,545
  4,764
  4,995
  5,238
  5,493
  5,761
  6,043
  6,340
  6,652
  6,979
Total debt, $m
  9,238
  9,451
  9,876
  10,333
  10,824
  11,349
  11,910
  12,507
  13,141
  13,814
  14,528
  15,283
  16,082
  16,925
  17,817
  18,757
  19,748
  20,793
  21,895
  23,055
  24,276
  25,561
  26,914
  28,337
  29,834
  31,408
  33,063
  34,803
  36,632
  38,555
  40,575
Total liabilities, $m
  11,711
  11,924
  12,349
  12,806
  13,297
  13,822
  14,383
  14,980
  15,614
  16,287
  17,001
  17,756
  18,555
  19,398
  20,290
  21,230
  22,221
  23,266
  24,368
  25,528
  26,749
  28,034
  29,387
  30,810
  32,307
  33,881
  35,536
  37,276
  39,105
  41,028
  43,048
Total equity, $m
  6,891
  7,124
  7,378
  7,651
  7,944
  8,258
  8,593
  8,950
  9,329
  9,731
  10,157
  10,608
  11,085
  11,590
  12,122
  12,684
  13,276
  13,900
  14,558
  15,251
  15,981
  16,749
  17,557
  18,407
  19,301
  20,242
  21,231
  22,270
  23,363
  24,512
  25,719
Total liabilities and equity, $m
  18,602
  19,048
  19,727
  20,457
  21,241
  22,080
  22,976
  23,930
  24,943
  26,018
  27,158
  28,364
  29,640
  30,988
  32,412
  33,914
  35,497
  37,166
  38,926
  40,779
  42,730
  44,783
  46,944
  49,217
  51,608
  54,123
  56,767
  59,546
  62,468
  65,540
  68,767
Debt-to-equity ratio
  1.341
  1.330
  1.340
  1.350
  1.360
  1.370
  1.390
  1.400
  1.410
  1.420
  1.430
  1.440
  1.450
  1.460
  1.470
  1.480
  1.490
  1.500
  1.500
  1.510
  1.520
  1.530
  1.530
  1.540
  1.550
  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
  1,555
  1,658
  1,773
  1,899
  2,037
  2,188
  2,351
  2,527
  2,718
  2,922
  3,719
  3,953
  4,203
  4,470
  4,755
  5,058
  5,380
  5,722
  6,085
  6,470
  6,878
  7,311
  7,769
  8,254
  8,767
  9,310
  9,884
  10,490
  11,131
  11,808
Depreciation, amort., depletion, $m
  294
  1,034
  1,043
  1,052
  1,062
  1,073
  1,084
  1,096
  1,109
  1,123
  1,137
  360
  377
  394
  412
  431
  451
  472
  495
  518
  543
  569
  597
  626
  656
  688
  721
  757
  794
  833
  874
Funds from operations, $m
  1,624
  2,589
  2,701
  2,825
  2,961
  3,110
  3,272
  3,447
  3,637
  3,840
  4,059
  4,079
  4,330
  4,597
  4,882
  5,186
  5,509
  5,852
  6,216
  6,603
  7,013
  7,447
  7,907
  8,395
  8,910
  9,455
  10,031
  10,640
  11,284
  11,964
  12,682
Change in working capital, $m
  -72
  64
  69
  74
  80
  85
  91
  97
  103
  109
  116
  122
  129
  137
  144
  152
  161
  169
  179
  188
  198
  208
  219
  231
  243
  255
  268
  282
  297
  312
  328
Cash from operations, $m
  1,696
  2,526
  2,632
  2,751
  2,881
  3,025
  3,181
  3,351
  3,534
  3,731
  3,943
  3,957
  4,200
  4,460
  4,738
  5,034
  5,348
  5,683
  6,038
  6,415
  6,815
  7,239
  7,688
  8,164
  8,667
  9,200
  9,763
  10,358
  10,987
  11,652
  12,354
Maintenance CAPEX, $m
  0
  -234
  -242
  -251
  -260
  -270
  -281
  -292
  -304
  -317
  -331
  -345
  -360
  -377
  -394
  -412
  -431
  -451
  -472
  -495
  -518
  -543
  -569
  -597
  -626
  -656
  -688
  -721
  -757
  -794
  -833
New CAPEX, $m
  -907
  -238
  -259
  -279
  -299
  -320
  -341
  -364
  -386
  -410
  -435
  -460
  -486
  -514
  -543
  -573
  -604
  -637
  -671
  -706
  -744
  -783
  -824
  -867
  -912
  -959
  -1,008
  -1,060
  -1,114
  -1,171
  -1,231
Cash from investing activities, $m
  -1,462
  -472
  -501
  -530
  -559
  -590
  -622
  -656
  -690
  -727
  -766
  -805
  -846
  -891
  -937
  -985
  -1,035
  -1,088
  -1,143
  -1,201
  -1,262
  -1,326
  -1,393
  -1,464
  -1,538
  -1,615
  -1,696
  -1,781
  -1,871
  -1,965
  -2,064
Free cash flow, $m
  234
  2,053
  2,132
  2,221
  2,322
  2,435
  2,559
  2,695
  2,843
  3,004
  3,178
  3,152
  3,353
  3,570
  3,801
  4,049
  4,313
  4,595
  4,895
  5,214
  5,553
  5,913
  6,295
  6,700
  7,130
  7,585
  8,067
  8,577
  9,117
  9,687
  10,291
Issuance/(repayment) of debt, $m
  1,191
  397
  425
  457
  491
  525
  561
  597
  634
  673
  713
  755
  799
  844
  891
  940
  992
  1,045
  1,101
  1,160
  1,221
  1,285
  1,353
  1,423
  1,497
  1,574
  1,655
  1,740
  1,829
  1,923
  2,020
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
  397
  425
  457
  491
  525
  561
  597
  634
  673
  713
  755
  799
  844
  891
  940
  992
  1,045
  1,101
  1,160
  1,221
  1,285
  1,353
  1,423
  1,497
  1,574
  1,655
  1,740
  1,829
  1,923
  2,020
Total cash flow (excl. dividends), $m
  409
  2,451
  2,556
  2,679
  2,813
  2,960
  3,119
  3,292
  3,478
  3,677
  3,892
  3,907
  4,152
  4,414
  4,692
  4,989
  5,305
  5,640
  5,996
  6,374
  6,774
  7,198
  7,648
  8,123
  8,627
  9,159
  9,722
  10,317
  10,946
  11,610
  12,311
Retained Cash Flow (-), $m
  -331
  -233
  -254
  -273
  -293
  -314
  -335
  -357
  -379
  -402
  -426
  -451
  -477
  -504
  -532
  -562
  -592
  -624
  -658
  -693
  -730
  -768
  -808
  -850
  -894
  -940
  -989
  -1,040
  -1,093
  -1,149
  -1,207
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
 
  2,218
  2,302
  2,405
  2,520
  2,646
  2,785
  2,935
  3,099
  3,275
  3,465
  3,456
  3,675
  3,909
  4,160
  4,427
  4,712
  5,016
  5,338
  5,681
  6,045
  6,430
  6,840
  7,273
  7,733
  8,219
  8,733
  9,277
  9,853
  10,461
  11,104
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
 
  2,042
  1,937
  1,833
  1,724
  1,610
  1,491
  1,368
  1,242
  1,116
  991
  817
  708
  604
  507
  419
  339
  269
  209
  159
  118
  86
  61
  42
  28
  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 25.5
Price to Sales 5.3
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 23.1
Price to Free Cash Flow 49.6
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 3.4% 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 8.6%, 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 196.551 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 $39.5 billion.

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COMPANY NEWS

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▶ Why Constellation Brands Stock Has Soared 25% This Year   [Jul-03-17 07:22PM  Motley Fool]
▶ Why Constellation Brands 1Q Sales Rose   [04:35PM  Market Realist]
▶ Company News for June 30, 2017   [10:43AM  Zacks]
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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