Intrinsic value of Sunoco - SUN

Previous Close

$30.44

  Intrinsic Value

$525.32

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+92%

Previous close

$30.44

 
Intrinsic value

$525.32

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+92%

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

We calculate the intrinsic value of SUN 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 3.3

 

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, %
  -14.96
  37.20
  33.98
  31.08
  28.47
  26.13
  24.01
  22.11
  20.40
  18.86
  17.47
  16.23
  15.10
  14.09
  13.18
  12.37
  11.63
  10.97
  10.37
  9.83
  9.35
  8.91
  8.52
  8.17
  7.85
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
Revenue, $m
  15,698
  21,538
  28,856
  37,825
  48,595
  61,292
  76,010
  92,818
  111,754
  132,832
  156,044
  181,366
  208,761
  238,184
  269,588
  302,926
  338,156
  375,240
  414,153
  454,877
  497,407
  541,749
  587,924
  635,963
  685,911
  737,824
  791,771
  847,832
  906,099
  966,673
  1,029,668
Variable operating expenses, $m
 
  16,896
  22,548
  29,475
  37,793
  47,599
  58,966
  71,947
  86,572
  102,851
  120,778
  140,073
  161,231
  183,955
  208,209
  233,957
  261,165
  289,807
  319,860
  351,312
  384,158
  418,405
  454,067
  491,169
  529,745
  569,838
  611,503
  654,800
  699,801
  746,583
  795,236
Fixed operating expenses, $m
 
  3,736
  3,830
  3,925
  4,023
  4,124
  4,227
  4,333
  4,441
  4,552
  4,666
  4,783
  4,902
  5,025
  5,150
  5,279
  5,411
  5,546
  5,685
  5,827
  5,973
  6,122
  6,275
  6,432
  6,593
  6,758
  6,927
  7,100
  7,277
  7,459
  7,646
Total operating expenses, $m
  15,946
  20,632
  26,378
  33,400
  41,816
  51,723
  63,193
  76,280
  91,013
  107,403
  125,444
  144,856
  166,133
  188,980
  213,359
  239,236
  266,576
  295,353
  325,545
  357,139
  390,131
  424,527
  460,342
  497,601
  536,338
  576,596
  618,430
  661,900
  707,078
  754,042
  802,882
Operating income, $m
  -248
  906
  2,479
  4,425
  6,779
  9,569
  12,817
  16,538
  20,741
  25,429
  30,600
  36,510
  42,628
  49,204
  56,229
  63,690
  71,579
  79,887
  88,608
  97,738
  107,275
  117,222
  127,582
  138,362
  149,574
  161,228
  173,342
  185,932
  199,021
  212,630
  226,786
EBITDA, $m
  71
  1,435
  3,099
  5,156
  7,644
  10,592
  14,022
  17,952
  22,390
  27,340
  32,799
  38,762
  45,219
  52,161
  59,575
  67,451
  75,777
  84,546
  93,749
  103,385
  113,450
  123,947
  134,880
  146,257
  158,088
  170,387
  183,171
  196,457
  210,269
  224,630
  239,568
Interest expense (income), $m
  188
  262
  402
  577
  793
  1,051
  1,356
  1,709
  2,113
  2,567
  3,073
  3,630
  4,238
  4,896
  5,602
  6,356
  7,156
  8,002
  8,892
  9,826
  10,804
  11,825
  12,889
  13,998
  15,151
  16,350
  17,596
  18,891
  20,237
  21,636
  23,090
Earnings before tax, $m
  -437
  644
  2,077
  3,848
  5,986
  8,518
  11,461
  14,829
  18,628
  22,862
  27,527
  32,880
  38,390
  44,309
  50,627
  57,334
  64,423
  71,885
  79,716
  87,912
  96,471
  105,397
  114,692
  124,364
  134,422
  144,878
  155,745
  167,041
  178,784
  190,994
  203,696
Tax expense, $m
  -31
  174
  561
  1,039
  1,616
  2,300
  3,094
  4,004
  5,030
  6,173
  7,432
  8,878
  10,365
  11,963
  13,669
  15,480
  17,394
  19,409
  21,523
  23,736
  26,047
  28,457
  30,967
  33,578
  36,294
  39,117
  42,051
  45,101
  48,272
  51,569
  54,998
Net income, $m
  -406
  470
  1,516
  2,809
  4,370
  6,218
  8,367
  10,825
  13,599
  16,689
  20,095
  24,002
  28,024
  32,345
  36,957
  41,854
  47,029
  52,476
  58,193
  64,175
  70,424
  76,940
  83,725
  90,786
  98,128
  105,761
  113,694
  121,940
  130,512
  139,426
  148,698

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  119
  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
  8,701
  11,776
  15,777
  20,681
  26,569
  33,511
  41,558
  50,748
  61,101
  72,625
  85,317
  99,161
  114,139
  130,226
  147,396
  165,624
  184,886
  205,161
  226,437
  248,702
  271,956
  296,200
  321,446
  347,711
  375,020
  403,403
  432,898
  463,549
  495,407
  528,525
  562,968
Adjusted assets (=assets-cash), $m
  8,582
  11,776
  15,777
  20,681
  26,569
  33,511
  41,558
  50,748
  61,101
  72,625
  85,317
  99,161
  114,139
  130,226
  147,396
  165,624
  184,886
  205,161
  226,437
  248,702
  271,956
  296,200
  321,446
  347,711
  375,020
  403,403
  432,898
  463,549
  495,407
  528,525
  562,968
Revenue / Adjusted assets
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
  1.829
Average production assets, $m
  4,522
  6,203
  8,311
  10,894
  13,996
  17,652
  21,891
  26,732
  32,185
  38,256
  44,941
  52,233
  60,123
  68,597
  77,641
  87,243
  97,389
  108,069
  119,276
  131,005
  143,253
  156,024
  169,322
  183,157
  197,542
  212,493
  228,030
  244,176
  260,956
  278,402
  296,544
Working capital, $m
  200
  108
  144
  189
  243
  306
  380
  464
  559
  664
  780
  907
  1,044
  1,191
  1,348
  1,515
  1,691
  1,876
  2,071
  2,274
  2,487
  2,709
  2,940
  3,180
  3,430
  3,689
  3,959
  4,239
  4,530
  4,833
  5,148
Total debt, $m
  4,514
  6,923
  9,952
  13,664
  18,122
  23,377
  29,469
  36,425
  44,263
  52,986
  62,594
  73,074
  84,412
  96,590
  109,588
  123,386
  137,967
  153,316
  169,422
  186,277
  203,879
  222,232
  241,343
  261,226
  281,899
  303,385
  325,713
  348,916
  373,032
  398,103
  424,175
Total liabilities, $m
  6,505
  8,914
  11,943
  15,655
  20,113
  25,368
  31,460
  38,416
  46,254
  54,977
  64,585
  75,065
  86,403
  98,581
  111,579
  125,377
  139,958
  155,307
  171,413
  188,268
  205,870
  224,223
  243,334
  263,217
  283,890
  305,376
  327,704
  350,907
  375,023
  400,094
  426,166
Total equity, $m
  2,196
  2,861
  3,834
  5,025
  6,456
  8,143
  10,099
  12,332
  14,848
  17,648
  20,732
  24,096
  27,736
  31,645
  35,817
  40,247
  44,927
  49,854
  55,024
  60,435
  66,085
  71,977
  78,111
  84,494
  91,130
  98,027
  105,194
  112,643
  120,384
  128,432
  136,801
Total liabilities and equity, $m
  8,701
  11,775
  15,777
  20,680
  26,569
  33,511
  41,559
  50,748
  61,102
  72,625
  85,317
  99,161
  114,139
  130,226
  147,396
  165,624
  184,885
  205,161
  226,437
  248,703
  271,955
  296,200
  321,445
  347,711
  375,020
  403,403
  432,898
  463,550
  495,407
  528,526
  562,967
Debt-to-equity ratio
  2.056
  2.420
  2.600
  2.720
  2.810
  2.870
  2.920
  2.950
  2.980
  3.000
  3.020
  3.030
  3.040
  3.050
  3.060
  3.070
  3.070
  3.080
  3.080
  3.080
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.100
  3.100
  3.100
  3.100
  3.100
Adjusted equity ratio
  0.242
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243
  0.243

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -406
  470
  1,516
  2,809
  4,370
  6,218
  8,367
  10,825
  13,599
  16,689
  20,095
  24,002
  28,024
  32,345
  36,957
  41,854
  47,029
  52,476
  58,193
  64,175
  70,424
  76,940
  83,725
  90,786
  98,128
  105,761
  113,694
  121,940
  130,512
  139,426
  148,698
Depreciation, amort., depletion, $m
  319
  529
  620
  731
  865
  1,023
  1,205
  1,414
  1,649
  1,911
  2,199
  2,251
  2,592
  2,957
  3,347
  3,760
  4,198
  4,658
  5,141
  5,647
  6,175
  6,725
  7,298
  7,895
  8,515
  9,159
  9,829
  10,525
  11,248
  12,000
  12,782
Funds from operations, $m
  536
  999
  2,136
  3,540
  5,235
  7,241
  9,572
  12,239
  15,248
  18,600
  22,293
  26,254
  30,616
  35,302
  40,304
  45,614
  51,227
  57,134
  63,334
  69,822
  76,599
  83,665
  91,024
  98,681
  106,643
  114,920
  123,523
  132,465
  141,760
  151,426
  161,480
Change in working capital, $m
  -25
  29
  37
  45
  54
  63
  74
  84
  95
  105
  116
  127
  137
  147
  157
  167
  176
  185
  195
  204
  213
  222
  231
  240
  250
  260
  270
  280
  291
  303
  315
Cash from operations, $m
  561
  970
  2,100
  3,495
  5,181
  7,177
  9,498
  12,155
  15,153
  18,494
  22,177
  26,127
  30,479
  35,155
  40,147
  45,448
  51,050
  56,949
  63,139
  69,619
  76,386
  83,443
  90,793
  98,441
  106,393
  114,661
  123,253
  132,184
  141,469
  151,123
  161,165
Maintenance CAPEX, $m
  0
  -195
  -267
  -358
  -470
  -603
  -761
  -944
  -1,152
  -1,387
  -1,649
  -1,937
  -2,251
  -2,592
  -2,957
  -3,347
  -3,760
  -4,198
  -4,658
  -5,141
  -5,647
  -6,175
  -6,725
  -7,298
  -7,895
  -8,515
  -9,159
  -9,829
  -10,525
  -11,248
  -12,000
New CAPEX, $m
  -490
  -1,681
  -2,108
  -2,583
  -3,102
  -3,657
  -4,239
  -4,841
  -5,454
  -6,070
  -6,685
  -7,293
  -7,890
  -8,474
  -9,044
  -9,601
  -10,146
  -10,680
  -11,207
  -11,728
  -12,249
  -12,771
  -13,298
  -13,835
  -14,385
  -14,951
  -15,537
  -16,146
  -16,781
  -17,445
  -18,143
Cash from investing activities, $m
  -3,016
  -1,876
  -2,375
  -2,941
  -3,572
  -4,260
  -5,000
  -5,785
  -6,606
  -7,457
  -8,334
  -9,230
  -10,141
  -11,066
  -12,001
  -12,948
  -13,906
  -14,878
  -15,865
  -16,869
  -17,896
  -18,946
  -20,023
  -21,133
  -22,280
  -23,466
  -24,696
  -25,975
  -27,306
  -28,693
  -30,143
Free cash flow, $m
  -2,455
  -906
  -275
  554
  1,610
  2,917
  4,499
  6,371
  8,547
  11,037
  13,843
  16,897
  20,338
  24,089
  28,146
  32,500
  37,144
  42,071
  47,274
  52,749
  58,491
  64,498
  70,769
  77,307
  84,114
  91,195
  98,557
  106,210
  114,163
  122,430
  131,023
Issuance/(repayment) of debt, $m
  2,577
  2,414
  3,029
  3,712
  4,458
  5,255
  6,092
  6,956
  7,837
  8,724
  9,607
  10,480
  11,338
  12,178
  12,998
  13,798
  14,581
  15,349
  16,105
  16,855
  17,603
  18,353
  19,111
  19,883
  20,673
  21,486
  22,328
  23,203
  24,116
  25,071
  26,073
Issuance/(repurchase) of shares, $m
  132
  309
  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  
  2,937
  2,723
  3,029
  3,712
  4,458
  5,255
  6,092
  6,956
  7,837
  8,724
  9,607
  10,480
  11,338
  12,178
  12,998
  13,798
  14,581
  15,349
  16,105
  16,855
  17,603
  18,353
  19,111
  19,883
  20,673
  21,486
  22,328
  23,203
  24,116
  25,071
  26,073
Total cash flow (excl. dividends), $m
  482
  1,817
  2,754
  4,266
  6,068
  8,172
  10,590
  13,327
  16,385
  19,761
  23,451
  27,378
  31,676
  36,267
  41,144
  46,298
  51,725
  57,420
  63,380
  69,604
  76,093
  82,851
  89,881
  97,190
  104,786
  112,681
  120,885
  129,413
  138,279
  147,501
  157,096
Retained Cash Flow (-), $m
  3,067
  -779
  -972
  -1,192
  -1,431
  -1,687
  -1,955
  -2,233
  -2,516
  -2,800
  -3,084
  -3,364
  -3,640
  -3,909
  -4,172
  -4,429
  -4,681
  -4,927
  -5,170
  -5,411
  -5,650
  -5,891
  -6,135
  -6,382
  -6,636
  -6,897
  -7,167
  -7,448
  -7,741
  -8,048
  -8,369
Prev. year cash balance distribution, $m
 
  114
  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
 
  1,152
  1,781
  3,075
  4,637
  6,485
  8,635
  11,094
  13,869
  16,960
  20,367
  24,014
  28,037
  32,358
  36,971
  41,869
  47,044
  52,493
  58,210
  64,193
  70,443
  76,959
  83,746
  90,807
  98,150
  105,784
  113,718
  121,965
  130,538
  139,453
  148,726
Discount rate, %
 
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
 
  1,047
  1,459
  2,247
  2,992
  3,655
  4,200
  4,600
  4,838
  4,907
  4,815
  4,566
  4,216
  3,780
  3,293
  2,787
  2,291
  1,830
  1,418
  1,067
  778
  550
  376
  248
  159
  98
  58
  33
  18
  10
  5
Current shareholders' claim on cash, %
  100
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0
  91.0

Sunoco LP engages in the wholesale distribution and retail sale of motor fuels primarily in Texas, New Mexico, Oklahoma, Louisiana, Kansas, Maryland, Virginia, Tennessee, Georgia, and Hawaii. The company operates through two segments, Wholesale and Retail. It serves convenience stores and consignment locations, contracted independent convenience store operators, and other commercial customers. The company also distributes other petroleum products, such as propane and lubricating oils; and leases or subleases real estate properties used in the retail distribution of motor fuels. As of December 31, 2014, it operated 900 convenience stores and fuel outlets offering merchandise, food service, motor fuel, and other services in 8 states. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP is based in Dallas, Texas. Sunoco LP is a subsidiary of Susser Holdings Corporation.

FINANCIAL RATIOS  of  Sunoco (SUN)

Valuation Ratios
P/E Ratio -757.9
Price to Sales 19.6
Price to Book 140.1
Price to Tangible Book
Price to Cash Flow 548.5
Price to Free Cash Flow 4333.8
Growth Rates
Sales Growth Rate -15%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -11.2%
Cap. Spend. - 3 Yr. Gr. Rate 33.4%
Financial Strength
Quick Ratio 24
Current Ratio 0.3
LT Debt to Equity 205.3%
Total Debt to Equity 205.6%
Interest Coverage -1
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. 0.4%
Return On Total Capital -5.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.7%
Return On Equity -10.9%
Return On Equity - 3 Yr. Avg. -2%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 14.1%
Gross Margin - 3 Yr. Avg. 9.4%
EBITDA Margin 0.4%
EBITDA Margin - 3 Yr. Avg. 1.8%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. 0.5%
Pre-Tax Margin -2.8%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin -2.6%
Net Profit Margin - 3 Yr. Avg. -0.4%
Effective Tax Rate 7.1%
Eff/ Tax Rate - 3 Yr. Avg. 10.5%
Payout Ratio -107.4%

SUN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SUN stock intrinsic value calculation we used $15698 million for the last fiscal year's total revenue generated by Sunoco. The default revenue input number comes from 2016 income statement of Sunoco. 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 SUN stock valuation model: a) initial revenue growth rate of 37.2% 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 10%, whose default value for SUN is calculated based on our internal credit rating of Sunoco, 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 Sunoco.
    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 SUN stock the variable cost ratio is equal to 78.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3645 million in the base year in the intrinsic value calculation for SUN 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 5.8% for Sunoco.

Corporate tax rate of 27% is the nominal tax rate for Sunoco. 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 SUN 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 SUN are equal to 28.8%.

Life of production assets of 23.2 years is the average useful life of capital assets used in Sunoco 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 SUN is equal to 0.5%. 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 - $2196 million for Sunoco - 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 107.957 million for Sunoco 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 Sunoco at the current share price and the inputted number of shares is $3.3 billion.

RELATED COMPANIES Price Int.Val. Rating
SRLP Sprague Resour 26.15 79.25  str.buy
CAPL CrossAmerica P 26.55 3.28  str.sell
VLO Valero Energy 64.75 2,056.36  str.buy
CLNE Clean Energy F 2.30 0.71  str.sell
XOM Exxon Mobil 76.64 102.38  buy
GLP Global Partner 16.20 240.62  str.buy
UGP Ultrapar Parti 22.26 15.21  sell
NGL NGL Energy Par 9.30 17.98  buy

COMPANY NEWS

▶ Why these MLPs Rose More than 5% Last Week   [Aug-01-17 03:07PM  Market Realist]
▶ Sunoco LP Maintains Quarterly Distribution   [Jul-26-17 04:30PM  PR Newswire]
▶ Judge halts Sunoco pipeline work in eastern Pennsylvania   [Jul-25-17 06:12PM  Associated Press]
▶ Pa. senator says Sunoco didn't notify homeowners about drilling   [Jul-19-17 09:35AM  American City Business Journals]
▶ 5 Things Sunoco LP's Management Thinks You Should Know   [Jul-17-17 08:20PM  Motley Fool]
▶ 3 Things You Didn't Know About Suncor Energy Inc.   [Jun-30-17 11:16AM  Motley Fool]
▶ Sunoco Free Fuel 5000 Returns For Thirteenth Year   [Jun-29-17 02:00PM  PR Newswire]
▶ Sunoco LP Value Analysis (NYSE:SUN) : June 27, 2017   [Jun-27-17 04:52PM  Capital Cube]
▶ Buy Energy Transfer Partners LPs (ETP) Latest Transition   [Jun-20-17 12:16PM  InvestorPlace]
▶ How Sunoco LP Makes Most of Its Money   [10:00AM  Motley Fool]
▶ Sunoco LP to Participate in Deutsche Bank Conference   [May-09-17 07:00AM  PR Newswire]
▶ These Were the Top-Performing MLPs in April 2017   [May-08-17 07:37AM  Market Realist]
▶ Here's Why Sunoco LP Rose 25.8% in April   [May-04-17 09:31AM  Motley Fool]
▶ Energy Transfer Equity Announces Dividend   [May-01-17 04:13PM  GuruFocus.com]
▶ Sunoco LP Maintains Quarterly Distribution   [Apr-27-17 06:06PM  PR Newswire]
▶ Better Buy: Sunoco LP vs. ConocoPhillips   [11:12AM  Motley Fool]
▶ 10 Retailers That Control Americas Gasoline Sales   [Apr-21-17 06:55AM  24/7 Wall St.]
▶ Tesla Hits New High, Tops GM's Market Cap; Amazon, Ulta Beauty Touted   [Apr-10-17 04:21PM  Investor's Business Daily]
▶ IIROC Trade Resumption - SUN   [10:34AM  PR Newswire]
▶ IIROC Trade Resumption - SUN   [10:34AM  CNW Group]
▶ IIROC Trading Halt - SUN   [Apr-07-17 04:29PM  CNW Group]
▶ Company News for April 07, 2017   [10:20AM  Zacks]
▶ 7-Eleven adding more than 1,100 stores in $3.3 billion deal   [Apr-06-17 10:20PM  American City Business Journals]
▶ [$$] 7-Eleven: station in life   [01:53PM  Financial Times]
▶ 7-Eleven to Buy Sunoco Assets   [01:49PM  Investopedia]
▶ [$$] Seven & i agrees $3.3bn deal with Sunoco   [01:07PM  Financial Times]
▶ $3.3 billion deal to bring 7-Eleven back to Houston   [12:55PM  American City Business Journals]
▶ 3 Tempting High-Yield Dividend Stocks to Avoid   [Apr-01-17 11:42AM  Motley Fool]
▶ Why Sunoco LP Shareholders Have Something to Worry About   [Mar-31-17 02:00PM  Motley Fool]
▶ 3 Dividend Stocks That Are Too Unsafe   [Mar-16-17 11:00AM  Motley Fool]
Stock chart of SUN Financial statements of SUN
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.