Intrinsic value of Tyson Foods Cl A - TSN

Previous Close

$66.87

  Intrinsic Value

$53.48

stock screener

  Rating & Target

sell

-20%

  Value-price divergence*

+18%

Previous close

$66.87

 
Intrinsic value

$53.48

 
Up/down potential

-20%

 
Rating

sell

 
Value-price divergence*

+18%

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

We calculate the intrinsic value of TSN 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 23.8

 

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, %
  -10.86
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
  4.99
  4.99
  4.99
  4.99
Revenue, $m
  36,881
  38,651
  40,514
  42,474
  44,536
  46,705
  48,985
  51,382
  53,902
  56,550
  59,334
  62,259
  65,333
  68,563
  71,956
  75,521
  79,266
  83,200
  87,332
  91,673
  96,232
  101,020
  106,049
  111,330
  116,877
  122,702
  128,820
  135,244
  141,991
  149,075
  156,515
Variable operating expenses, $m
 
  36,609
  38,342
  40,165
  42,082
  44,098
  46,219
  48,448
  50,791
  53,254
  55,843
  57,896
  60,755
  63,758
  66,913
  70,229
  73,711
  77,369
  81,212
  85,248
  89,488
  93,940
  98,617
  103,528
  108,686
  114,103
  119,792
  125,766
  132,040
  138,628
  145,546
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  34,048
  36,609
  38,342
  40,165
  42,082
  44,098
  46,219
  48,448
  50,791
  53,254
  55,843
  57,896
  60,755
  63,758
  66,913
  70,229
  73,711
  77,369
  81,212
  85,248
  89,488
  93,940
  98,617
  103,528
  108,686
  114,103
  119,792
  125,766
  132,040
  138,628
  145,546
Operating income, $m
  2,833
  2,042
  2,172
  2,310
  2,454
  2,606
  2,766
  2,934
  3,111
  3,296
  3,491
  4,363
  4,579
  4,805
  5,043
  5,293
  5,555
  5,831
  6,120
  6,425
  6,744
  7,080
  7,432
  7,802
  8,191
  8,599
  9,028
  9,478
  9,951
  10,448
  10,969
EBITDA, $m
  3,538
  3,156
  3,308
  3,468
  3,637
  3,814
  4,000
  4,196
  4,402
  4,618
  4,845
  5,084
  5,335
  5,599
  5,876
  6,167
  6,473
  6,794
  7,131
  7,486
  7,858
  8,249
  8,660
  9,091
  9,544
  10,020
  10,519
  11,044
  11,595
  12,173
  12,781
Interest expense (income), $m
  242
  229
  252
  276
  300
  327
  354
  383
  414
  446
  480
  515
  552
  591
  632
  676
  721
  769
  819
  871
  926
  984
  1,045
  1,109
  1,177
  1,247
  1,321
  1,399
  1,481
  1,567
  1,657
Earnings before tax, $m
  2,598
  1,812
  1,921
  2,034
  2,154
  2,280
  2,412
  2,551
  2,697
  2,850
  3,012
  3,848
  4,027
  4,214
  4,410
  4,617
  4,834
  5,062
  5,302
  5,553
  5,818
  6,095
  6,387
  6,693
  7,014
  7,352
  7,707
  8,079
  8,470
  8,881
  9,312
Tax expense, $m
  826
  489
  519
  549
  582
  615
  651
  689
  728
  770
  813
  1,039
  1,087
  1,138
  1,191
  1,247
  1,305
  1,367
  1,431
  1,499
  1,571
  1,646
  1,724
  1,807
  1,894
  1,985
  2,081
  2,181
  2,287
  2,398
  2,514
Net income, $m
  1,768
  1,323
  1,402
  1,485
  1,572
  1,664
  1,761
  1,862
  1,969
  2,081
  2,199
  2,809
  2,939
  3,076
  3,220
  3,371
  3,529
  3,695
  3,870
  4,054
  4,247
  4,450
  4,662
  4,886
  5,121
  5,367
  5,626
  5,898
  6,183
  6,483
  6,798

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  349
  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
  22,373
  23,075
  24,188
  25,358
  26,589
  27,883
  29,245
  30,676
  32,180
  33,761
  35,423
  37,170
  39,005
  40,933
  42,959
  45,087
  47,323
  49,672
  52,139
  54,730
  57,452
  60,310
  63,313
  66,466
  69,777
  73,255
  76,907
  80,743
  84,771
  89,000
  93,442
Adjusted assets (=assets-cash), $m
  22,024
  23,075
  24,188
  25,358
  26,589
  27,883
  29,245
  30,676
  32,180
  33,761
  35,423
  37,170
  39,005
  40,933
  42,959
  45,087
  47,323
  49,672
  52,139
  54,730
  57,452
  60,310
  63,313
  66,466
  69,777
  73,255
  76,907
  80,743
  84,771
  89,000
  93,442
Revenue / Adjusted assets
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
  1.675
Average production assets, $m
  10,299
  10,784
  11,303
  11,850
  12,426
  13,031
  13,667
  14,336
  15,039
  15,778
  16,554
  17,370
  18,228
  19,129
  20,076
  21,070
  22,115
  23,213
  24,366
  25,577
  26,849
  28,185
  29,588
  31,061
  32,609
  34,234
  35,941
  37,733
  39,615
  41,592
  43,668
Working capital, $m
  2,126
  1,933
  2,026
  2,124
  2,227
  2,335
  2,449
  2,569
  2,695
  2,828
  2,967
  3,113
  3,267
  3,428
  3,598
  3,776
  3,963
  4,160
  4,367
  4,584
  4,812
  5,051
  5,302
  5,567
  5,844
  6,135
  6,441
  6,762
  7,100
  7,454
  7,826
Total debt, $m
  6,279
  6,805
  7,446
  8,120
  8,829
  9,575
  10,359
  11,183
  12,050
  12,961
  13,918
  14,924
  15,981
  17,092
  18,258
  19,484
  20,772
  22,125
  23,546
  25,038
  26,606
  28,253
  29,982
  31,798
  33,706
  35,709
  37,813
  40,022
  42,342
  44,778
  47,336
Total liabilities, $m
  12,765
  13,291
  13,932
  14,606
  15,315
  16,061
  16,845
  17,669
  18,536
  19,447
  20,404
  21,410
  22,467
  23,578
  24,744
  25,970
  27,258
  28,611
  30,032
  31,524
  33,092
  34,739
  36,468
  38,284
  40,192
  42,195
  44,299
  46,508
  48,828
  51,264
  53,822
Total equity, $m
  9,608
  9,784
  10,256
  10,752
  11,274
  11,823
  12,400
  13,006
  13,644
  14,315
  15,019
  15,760
  16,538
  17,356
  18,215
  19,117
  20,065
  21,061
  22,107
  23,206
  24,360
  25,572
  26,845
  28,182
  29,586
  31,060
  32,609
  34,235
  35,943
  37,736
  39,619
Total liabilities and equity, $m
  22,373
  23,075
  24,188
  25,358
  26,589
  27,884
  29,245
  30,675
  32,180
  33,762
  35,423
  37,170
  39,005
  40,934
  42,959
  45,087
  47,323
  49,672
  52,139
  54,730
  57,452
  60,311
  63,313
  66,466
  69,778
  73,255
  76,908
  80,743
  84,771
  89,000
  93,441
Debt-to-equity ratio
  0.654
  0.700
  0.730
  0.760
  0.780
  0.810
  0.840
  0.860
  0.880
  0.910
  0.930
  0.950
  0.970
  0.980
  1.000
  1.020
  1.040
  1.050
  1.070
  1.080
  1.090
  1.100
  1.120
  1.130
  1.140
  1.150
  1.160
  1.170
  1.180
  1.190
  1.190
Adjusted equity ratio
  0.420
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,768
  1,323
  1,402
  1,485
  1,572
  1,664
  1,761
  1,862
  1,969
  2,081
  2,199
  2,809
  2,939
  3,076
  3,220
  3,371
  3,529
  3,695
  3,870
  4,054
  4,247
  4,450
  4,662
  4,886
  5,121
  5,367
  5,626
  5,898
  6,183
  6,483
  6,798
Depreciation, amort., depletion, $m
  705
  1,114
  1,136
  1,159
  1,182
  1,208
  1,234
  1,262
  1,291
  1,322
  1,354
  721
  756
  794
  833
  874
  918
  963
  1,011
  1,061
  1,114
  1,169
  1,228
  1,289
  1,353
  1,420
  1,491
  1,566
  1,644
  1,726
  1,812
Funds from operations, $m
  2,779
  2,437
  2,538
  2,644
  2,755
  2,872
  2,995
  3,124
  3,260
  3,402
  3,552
  3,530
  3,696
  3,870
  4,053
  4,245
  4,447
  4,659
  4,881
  5,115
  5,361
  5,619
  5,890
  6,175
  6,474
  6,788
  7,117
  7,463
  7,827
  8,209
  8,610
Change in working capital, $m
  63
  89
  93
  98
  103
  108
  114
  120
  126
  132
  139
  146
  154
  161
  170
  178
  187
  197
  207
  217
  228
  239
  251
  264
  277
  291
  306
  321
  337
  354
  372
Cash from operations, $m
  2,716
  2,349
  2,445
  2,546
  2,652
  2,763
  2,881
  3,004
  3,134
  3,270
  3,413
  3,384
  3,542
  3,708
  3,883
  4,067
  4,259
  4,462
  4,675
  4,898
  5,133
  5,380
  5,639
  5,911
  6,196
  6,496
  6,811
  7,142
  7,490
  7,855
  8,238
Maintenance CAPEX, $m
  0
  -427
  -447
  -469
  -492
  -516
  -541
  -567
  -595
  -624
  -655
  -687
  -721
  -756
  -794
  -833
  -874
  -918
  -963
  -1,011
  -1,061
  -1,114
  -1,169
  -1,228
  -1,289
  -1,353
  -1,420
  -1,491
  -1,566
  -1,644
  -1,726
New CAPEX, $m
  -695
  -485
  -520
  -547
  -575
  -605
  -636
  -669
  -703
  -739
  -777
  -816
  -858
  -901
  -947
  -995
  -1,045
  -1,098
  -1,153
  -1,211
  -1,272
  -1,336
  -1,403
  -1,474
  -1,548
  -1,625
  -1,707
  -1,792
  -1,882
  -1,977
  -2,076
Cash from investing activities, $m
  -684
  -912
  -967
  -1,016
  -1,067
  -1,121
  -1,177
  -1,236
  -1,298
  -1,363
  -1,432
  -1,503
  -1,579
  -1,657
  -1,741
  -1,828
  -1,919
  -2,016
  -2,116
  -2,222
  -2,333
  -2,450
  -2,572
  -2,702
  -2,837
  -2,978
  -3,127
  -3,283
  -3,448
  -3,621
  -3,802
Free cash flow, $m
  2,032
  1,437
  1,478
  1,530
  1,585
  1,643
  1,704
  1,768
  1,836
  1,907
  1,982
  1,881
  1,964
  2,051
  2,143
  2,239
  2,340
  2,447
  2,559
  2,676
  2,800
  2,930
  3,066
  3,209
  3,360
  3,518
  3,684
  3,859
  4,042
  4,234
  4,436
Issuance/(repayment) of debt, $m
  -413
  605
  641
  674
  709
  746
  784
  824
  867
  911
  957
  1,006
  1,057
  1,111
  1,167
  1,226
  1,288
  1,353
  1,421
  1,493
  1,568
  1,647
  1,729
  1,816
  1,907
  2,003
  2,104
  2,209
  2,320
  2,436
  2,558
Issuance/(repurchase) of shares, $m
  -1,816
  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  
  -2,161
  605
  641
  674
  709
  746
  784
  824
  867
  911
  957
  1,006
  1,057
  1,111
  1,167
  1,226
  1,288
  1,353
  1,421
  1,493
  1,568
  1,647
  1,729
  1,816
  1,907
  2,003
  2,104
  2,209
  2,320
  2,436
  2,558
Total cash flow (excl. dividends), $m
  -123
  2,042
  2,118
  2,204
  2,294
  2,388
  2,488
  2,592
  2,702
  2,818
  2,939
  2,887
  3,021
  3,162
  3,309
  3,465
  3,628
  3,800
  3,980
  4,169
  4,368
  4,576
  4,795
  5,026
  5,267
  5,521
  5,788
  6,068
  6,362
  6,671
  6,995
Retained Cash Flow (-), $m
  83
  -446
  -472
  -496
  -522
  -549
  -577
  -607
  -638
  -670
  -705
  -741
  -778
  -818
  -859
  -902
  -948
  -996
  -1,046
  -1,099
  -1,154
  -1,212
  -1,273
  -1,337
  -1,404
  -1,475
  -1,549
  -1,626
  -1,708
  -1,793
  -1,883
Prev. year cash balance distribution, $m
 
  270
  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
 
  1,866
  1,647
  1,708
  1,772
  1,839
  1,911
  1,986
  2,064
  2,147
  2,235
  2,146
  2,243
  2,344
  2,450
  2,562
  2,680
  2,804
  2,934
  3,070
  3,214
  3,364
  3,522
  3,689
  3,863
  4,047
  4,239
  4,442
  4,654
  4,877
  5,111
Discount rate, %
 
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
 
  1,769
  1,472
  1,431
  1,384
  1,331
  1,272
  1,207
  1,137
  1,063
  985
  835
  762
  689
  616
  544
  474
  408
  346
  289
  238
  193
  153
  119
  91
  68
  50
  36
  25
  17
  11
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

Tyson Foods, Inc. is a food company, which is engaged in offering chicken, beef and pork, as well as prepared foods. The Company offers food products under Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair brands. The Company operates through four segments: Chicken, Beef, Pork and Prepared Foods. It operates a vertically integrated chicken production process, which consists of breeding stock, contract growers, feed production, processing, further-processing, marketing and transportation of chicken and related allied products, including animal and pet food ingredients. Through its subsidiary, Cobb-Vantress, Inc. (Cobb), the Company is engaged in supplying poultry breeding stock across the world. It produces a range of fresh, frozen and refrigerated food products. Its products are marketed and sold by its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores and military commissaries, among others.

FINANCIAL RATIOS  of  Tyson Foods Cl A (TSN)

Valuation Ratios
P/E Ratio 13.7
Price to Sales 0.7
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 8.9
Price to Free Cash Flow 11.9
Growth Rates
Sales Growth Rate -10.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.6%
Cap. Spend. - 3 Yr. Gr. Rate 4.5%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 64.5%
Total Debt to Equity 65.4%
Interest Coverage 12
Management Effectiveness
Return On Assets 8.5%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 10.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.3%
Return On Equity 18.3%
Return On Equity - 3 Yr. Avg. 14.3%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 12.7%
Gross Margin - 3 Yr. Avg. 9.8%
EBITDA Margin 9.6%
EBITDA Margin - 3 Yr. Avg. 7.3%
Operating Margin 7.7%
Oper. Margin - 3 Yr. Avg. 5.6%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 5%
Net Profit Margin 4.8%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 31.8%
Eff/ Tax Rate - 3 Yr. Avg. 33.2%
Payout Ratio 12.2%

TSN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TSN stock intrinsic value calculation we used $36881 million for the last fiscal year's total revenue generated by Tyson Foods Cl A. The default revenue input number comes from 2016 income statement of Tyson Foods 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 TSN stock valuation model: a) initial revenue growth rate of 4.8% 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 5.5%, whose default value for TSN is calculated based on our internal credit rating of Tyson Foods 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 Tyson Foods 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 TSN stock the variable cost ratio is equal to 94.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TSN 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 3.7% for Tyson Foods Cl A.

Corporate tax rate of 27% is the nominal tax rate for Tyson Foods 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 TSN 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 TSN are equal to 27.9%.

Life of production assets of 24.1 years is the average useful life of capital assets used in Tyson Foods 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 TSN is equal to 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 - $9608 million for Tyson Foods 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 355.889 million for Tyson Foods 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 Tyson Foods Cl A at the current share price and the inputted number of shares is $23.8 billion.

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COMPANY NEWS

▶ Leavenworth County rescinds bond support for Tyson complex   [Sep-18-17 04:10PM  American City Business Journals]
▶ Why Tyson Foods' Stock Offers Healthy Upside   [Sep-07-17 10:40AM  Benzinga]
▶ Tyson Foods Positioned to Thrive in a Dynamic Food Market   [Sep-06-17 12:11PM  GlobeNewswire]
▶ Tyson Foods announcement spurs pushback   [11:35AM  American City Business Journals]
▶ What Does Tyson Foods Incs (TSN) Share Price Indicate?   [Sep-05-17 08:55PM  Simply Wall St.]
▶ Tyson will develop $320M poultry complex near Tonganoxie   [05:23PM  American City Business Journals]
▶ Heres How Corn Makes America Go Round   [04:00AM  Bloomberg]
▶ Tyson Foods says inquiry into price-fixing claims is closed   [Aug-25-17 04:38PM  Associated Press]
▶ ETFs with exposure to Tyson Foods, Inc. : August 24, 2017   [Aug-24-17 04:12PM  Capital Cube]
▶ Top Ranked Value Stocks to Buy for August 18th   [Aug-18-17 09:36AM  Zacks]
▶ Local manufacturers putting millions into chicken and rice   [Aug-16-17 01:17PM  American City Business Journals]
▶ Tyson Foods to Webcast Barclays Conference Presentation   [Aug-14-17 05:00PM  GlobeNewswire]
▶ Tyson Foods, Inc. Announces Quarterly Dividend   [Aug-10-17 04:34PM  GlobeNewswire]
▶ Trade of the Day: Hormel Foods Corp (HRL)   [08:54AM  InvestorPlace]
▶ Wall Street Recommendations for TSN Stock after Q3   [Aug-09-17 09:07AM  Market Realist]
▶ Analyzing Tyson Foods Fiscal 3Q17 Sales Trends   [Aug-08-17 03:05PM  Market Realist]
▶ Company News For August 08, 2017   [09:35AM  Zacks]
▶ Tyson posts 3Q profit   [12:14AM  Associated Press]
▶ [$$] Fieldale Farms Offers to Settle Chicken-Pricing Lawsuit   [Aug-07-17 05:14PM  The Wall Street Journal]
▶ Tech firms drive US stock indexes to new highs   [05:00PM  Associated Press]
▶ What Happened in the Stock Market Today   [04:53PM  Motley Fool]
▶ [$$] Tyson Fattens Up Revenue on Higher Prices   [01:25PM  The Wall Street Journal]
▶ Higher prices beef up Tyson's results   [11:11AM  Reuters Videos]
▶ Dow To Continue Rally?   [11:11AM  Zacks]
▶ Can the Dow Go for 10 Straight?   [10:01AM  Zacks]
▶ Tyson Foods earnings beat estimates   [07:47AM  MarketWatch]
▶ Tyson posts 3Q profit   [07:42AM  Associated Press]
▶ What Analysts Recommend for Tyson Foods Stock   [09:08AM  Market Realist]
▶ Tyson Foods Streamlines Organization to Maximize Growth   [Aug-02-17 04:15PM  GlobeNewswire]
Financial statements of TSN
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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