Intrinsic value of WestRock - WRK

Previous Close

$56.29

  Intrinsic Value

$27.79

stock screener

  Rating & Target

str. sell

-51%

  Value-price divergence*

+128%

Previous close

$56.29

 
Intrinsic value

$27.79

 
Up/down potential

-51%

 
Rating

str. sell

 
Value-price divergence*

+128%

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

We calculate the intrinsic value of WRK 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 14.1

 

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, %
  27.39
  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
  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
Revenue, $m
  14,172
  14,838
  15,540
  16,279
  17,058
  17,877
  18,739
  19,646
  20,600
  21,604
  22,659
  23,768
  24,934
  26,159
  27,447
  28,801
  30,223
  31,718
  33,288
  34,937
  36,670
  38,490
  40,402
  42,410
  44,519
  46,734
  49,061
  51,505
  54,071
  56,766
  59,596
Variable operating expenses, $m
 
  13,688
  14,313
  14,971
  15,664
  16,393
  17,161
  17,968
  18,818
  19,711
  20,650
  21,160
  22,198
  23,289
  24,436
  25,641
  26,907
  28,238
  29,636
  31,104
  32,647
  34,267
  35,969
  37,757
  39,635
  41,607
  43,678
  45,854
  48,138
  50,538
  53,058
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
  13,739
  13,688
  14,313
  14,971
  15,664
  16,393
  17,161
  17,968
  18,818
  19,711
  20,650
  21,160
  22,198
  23,289
  24,436
  25,641
  26,907
  28,238
  29,636
  31,104
  32,647
  34,267
  35,969
  37,757
  39,635
  41,607
  43,678
  45,854
  48,138
  50,538
  53,058
Operating income, $m
  433
  1,150
  1,227
  1,308
  1,394
  1,484
  1,578
  1,678
  1,782
  1,892
  2,008
  2,608
  2,736
  2,870
  3,011
  3,160
  3,316
  3,480
  3,652
  3,833
  4,023
  4,223
  4,433
  4,653
  4,884
  5,127
  5,383
  5,651
  5,932
  6,228
  6,539
EBITDA, $m
  1,580
  2,489
  2,606
  2,730
  2,861
  2,998
  3,143
  3,295
  3,455
  3,623
  3,800
  3,986
  4,182
  4,387
  4,603
  4,830
  5,069
  5,320
  5,583
  5,859
  6,150
  6,455
  6,776
  7,113
  7,466
  7,838
  8,228
  8,638
  9,068
  9,520
  9,995
Interest expense (income), $m
  230
  220
  244
  270
  297
  326
  356
  387
  421
  456
  493
  531
  572
  615
  660
  707
  757
  809
  864
  922
  982
  1,046
  1,113
  1,183
  1,257
  1,334
  1,416
  1,501
  1,591
  1,685
  1,784
Earnings before tax, $m
  245
  930
  983
  1,038
  1,097
  1,158
  1,222
  1,290
  1,362
  1,437
  1,515
  2,076
  2,163
  2,255
  2,351
  2,453
  2,559
  2,671
  2,788
  2,911
  3,041
  3,177
  3,320
  3,470
  3,627
  3,793
  3,967
  4,150
  4,341
  4,543
  4,754
Tax expense, $m
  90
  251
  265
  280
  296
  313
  330
  348
  368
  388
  409
  561
  584
  609
  635
  662
  691
  721
  753
  786
  821
  858
  896
  937
  979
  1,024
  1,071
  1,120
  1,172
  1,227
  1,284
Net income, $m
  -396
  679
  718
  758
  800
  845
  892
  942
  994
  1,049
  1,106
  1,516
  1,579
  1,646
  1,716
  1,790
  1,868
  1,950
  2,035
  2,125
  2,220
  2,319
  2,423
  2,533
  2,648
  2,769
  2,896
  3,029
  3,169
  3,316
  3,471

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  341
  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
  23,038
  23,779
  24,904
  26,088
  27,336
  28,649
  30,030
  31,484
  33,013
  34,621
  36,312
  38,090
  39,958
  41,922
  43,986
  46,156
  48,435
  50,830
  53,346
  55,989
  58,766
  61,682
  64,746
  67,965
  71,345
  74,895
  78,623
  82,539
  86,652
  90,971
  95,507
Adjusted assets (=assets-cash), $m
  22,697
  23,779
  24,904
  26,088
  27,336
  28,649
  30,030
  31,484
  33,013
  34,621
  36,312
  38,090
  39,958
  41,922
  43,986
  46,156
  48,435
  50,830
  53,346
  55,989
  58,766
  61,682
  64,746
  67,965
  71,345
  74,895
  78,623
  82,539
  86,652
  90,971
  95,507
Revenue / Adjusted assets
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
  0.624
Average production assets, $m
  11,924
  12,479
  13,069
  13,691
  14,345
  15,034
  15,759
  16,522
  17,325
  18,169
  19,056
  19,989
  20,969
  22,000
  23,083
  24,222
  25,418
  26,675
  27,995
  29,382
  30,839
  32,370
  33,978
  35,667
  37,441
  39,304
  41,260
  43,315
  45,474
  47,740
  50,120
Working capital, $m
  1,730
  1,766
  1,849
  1,937
  2,030
  2,127
  2,230
  2,338
  2,451
  2,571
  2,696
  2,828
  2,967
  3,113
  3,266
  3,427
  3,597
  3,774
  3,961
  4,158
  4,364
  4,580
  4,808
  5,047
  5,298
  5,561
  5,838
  6,129
  6,434
  6,755
  7,092
Total debt, $m
  5,789
  6,105
  6,750
  7,429
  8,143
  8,896
  9,687
  10,520
  11,397
  12,318
  13,287
  14,305
  15,376
  16,501
  17,684
  18,927
  20,233
  21,605
  23,047
  24,562
  26,153
  27,824
  29,580
  31,424
  33,361
  35,395
  37,531
  39,775
  42,132
  44,606
  47,205
Total liabilities, $m
  13,309
  13,625
  14,270
  14,949
  15,663
  16,416
  17,207
  18,040
  18,917
  19,838
  20,807
  21,825
  22,896
  24,021
  25,204
  26,447
  27,753
  29,125
  30,567
  32,082
  33,673
  35,344
  37,100
  38,944
  40,881
  42,915
  45,051
  47,295
  49,652
  52,126
  54,725
Total equity, $m
  9,729
  10,154
  10,634
  11,140
  11,672
  12,233
  12,823
  13,444
  14,097
  14,783
  15,505
  16,264
  17,062
  17,901
  18,782
  19,708
  20,682
  21,704
  22,779
  23,907
  25,093
  26,338
  27,647
  29,021
  30,464
  31,980
  33,572
  35,244
  37,000
  38,845
  40,781
Total liabilities and equity, $m
  23,038
  23,779
  24,904
  26,089
  27,335
  28,649
  30,030
  31,484
  33,014
  34,621
  36,312
  38,089
  39,958
  41,922
  43,986
  46,155
  48,435
  50,829
  53,346
  55,989
  58,766
  61,682
  64,747
  67,965
  71,345
  74,895
  78,623
  82,539
  86,652
  90,971
  95,506
Debt-to-equity ratio
  0.595
  0.600
  0.630
  0.670
  0.700
  0.730
  0.760
  0.780
  0.810
  0.830
  0.860
  0.880
  0.900
  0.920
  0.940
  0.960
  0.980
  1.000
  1.010
  1.030
  1.040
  1.060
  1.070
  1.080
  1.100
  1.110
  1.120
  1.130
  1.140
  1.150
  1.160
Adjusted equity ratio
  0.414
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427
  0.427

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -396
  679
  718
  758
  800
  845
  892
  942
  994
  1,049
  1,106
  1,516
  1,579
  1,646
  1,716
  1,790
  1,868
  1,950
  2,035
  2,125
  2,220
  2,319
  2,423
  2,533
  2,648
  2,769
  2,896
  3,029
  3,169
  3,316
  3,471
Depreciation, amort., depletion, $m
  1,147
  1,338
  1,379
  1,422
  1,467
  1,515
  1,565
  1,617
  1,673
  1,731
  1,792
  1,379
  1,446
  1,517
  1,592
  1,670
  1,753
  1,840
  1,931
  2,026
  2,127
  2,232
  2,343
  2,460
  2,582
  2,711
  2,846
  2,987
  3,136
  3,292
  3,457
Funds from operations, $m
  1,662
  2,018
  2,097
  2,180
  2,268
  2,360
  2,457
  2,559
  2,667
  2,779
  2,898
  2,894
  3,025
  3,163
  3,308
  3,461
  3,621
  3,789
  3,966
  4,152
  4,347
  4,551
  4,767
  4,993
  5,230
  5,479
  5,741
  6,016
  6,305
  6,609
  6,927
Change in working capital, $m
  -26
  79
  84
  88
  93
  97
  103
  108
  114
  119
  126
  132
  139
  146
  153
  161
  169
  178
  187
  196
  206
  217
  228
  239
  251
  264
  277
  291
  305
  321
  337
Cash from operations, $m
  1,688
  1,938
  2,013
  2,092
  2,175
  2,262
  2,354
  2,451
  2,553
  2,660
  2,773
  2,762
  2,887
  3,018
  3,155
  3,300
  3,452
  3,611
  3,779
  3,955
  4,140
  4,335
  4,539
  4,754
  4,979
  5,216
  5,465
  5,726
  6,000
  6,288
  6,590
Maintenance CAPEX, $m
  0
  -822
  -861
  -901
  -944
  -989
  -1,037
  -1,087
  -1,139
  -1,195
  -1,253
  -1,314
  -1,379
  -1,446
  -1,517
  -1,592
  -1,670
  -1,753
  -1,840
  -1,931
  -2,026
  -2,127
  -2,232
  -2,343
  -2,460
  -2,582
  -2,711
  -2,846
  -2,987
  -3,136
  -3,292
New CAPEX, $m
  -797
  -555
  -590
  -622
  -655
  -689
  -725
  -763
  -802
  -844
  -887
  -933
  -981
  -1,031
  -1,083
  -1,138
  -1,196
  -1,257
  -1,320
  -1,387
  -1,457
  -1,531
  -1,608
  -1,689
  -1,774
  -1,863
  -1,957
  -2,055
  -2,158
  -2,267
  -2,380
Cash from investing activities, $m
  -1,351
  -1,377
  -1,451
  -1,523
  -1,599
  -1,678
  -1,762
  -1,850
  -1,941
  -2,039
  -2,140
  -2,247
  -2,360
  -2,477
  -2,600
  -2,730
  -2,866
  -3,010
  -3,160
  -3,318
  -3,483
  -3,658
  -3,840
  -4,032
  -4,234
  -4,445
  -4,668
  -4,901
  -5,145
  -5,403
  -5,672
Free cash flow, $m
  337
  561
  562
  569
  576
  584
  592
  601
  611
  621
  632
  515
  528
  541
  555
  569
  585
  602
  619
  637
  657
  677
  699
  722
  746
  771
  797
  825
  854
  885
  918
Issuance/(repayment) of debt, $m
  439
  609
  644
  679
  715
  752
  792
  833
  876
  921
  969
  1,019
  1,071
  1,125
  1,183
  1,243
  1,306
  1,372
  1,442
  1,515
  1,591
  1,671
  1,756
  1,844
  1,937
  2,034
  2,136
  2,244
  2,357
  2,475
  2,599
Issuance/(repurchase) of shares, $m
  -324
  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  
  150
  609
  644
  679
  715
  752
  792
  833
  876
  921
  969
  1,019
  1,071
  1,125
  1,183
  1,243
  1,306
  1,372
  1,442
  1,515
  1,591
  1,671
  1,756
  1,844
  1,937
  2,034
  2,136
  2,244
  2,357
  2,475
  2,599
Total cash flow (excl. dividends), $m
  494
  1,170
  1,207
  1,248
  1,291
  1,336
  1,384
  1,434
  1,487
  1,543
  1,601
  1,534
  1,598
  1,666
  1,737
  1,812
  1,891
  1,974
  2,061
  2,152
  2,248
  2,349
  2,454
  2,566
  2,682
  2,805
  2,934
  3,069
  3,211
  3,360
  3,517
Retained Cash Flow (-), $m
  1,923
  -473
  -480
  -506
  -533
  -561
  -590
  -621
  -653
  -687
  -722
  -759
  -798
  -839
  -881
  -926
  -973
  -1,023
  -1,074
  -1,129
  -1,186
  -1,245
  -1,308
  -1,374
  -1,443
  -1,516
  -1,592
  -1,672
  -1,756
  -1,844
  -1,937
Prev. year cash balance distribution, $m
 
  48
  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
 
  746
  726
  742
  758
  776
  794
  814
  834
  856
  879
  775
  800
  827
  856
  886
  918
  951
  986
  1,023
  1,062
  1,103
  1,146
  1,191
  1,239
  1,289
  1,342
  1,397
  1,455
  1,516
  1,580
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  703
  642
  610
  577
  542
  506
  469
  432
  394
  356
  273
  243
  214
  186
  160
  136
  114
  94
  76
  60
  47
  36
  27
  20
  14
  10
  7
  5
  3
  2
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

WestRock Company manufactures and sells paper and packaging solutions for the consumer and corrugated markets in North America, South America, Europe, and Asia. The company operates through Corrugated Packaging, Consumer Packaging, and Land and Development segments. The Corrugated Packaging segment produces containerboards, corrugated sheets, corrugated packaging, and preprinted linerboards for consumer and industrial products manufacturers, and corrugated box manufacturers; and recycled fiber. This segment also provides structural and graphic design, engineering services, and automated packaging machines; resells aluminum and plastics; and offers waste services. Its corrugated packaging products are used to provide protective packaging for the shipment and distribution of food, paper, health and beauty, other household, consumer, commercial, and industrial products. The Consumer Packaging segment manufactures and sells folding and beverage cartons, displays, dispensing, and interior partitions; paperboards; recycled paperboards; express mail envelopes for the overnight courier industry; and secondary packages and paperboard packaging for the healthcare market. This segment also manufactures and sells solid fiber and corrugated partitions and die-cut paperboard components; temporary and permanent point-of-purchase displays for the consumer products and retail markets; dispensing systems, such as pumps; lithographic laminated packaging products; flip-top and applicator closures; plastic packaging products; trigger sprayers; aerosol actuators; hose-end sprayers; spouted and applicator closures; and sprayers for nasal and throat applications, as well as provides contract packing services. The company’s Land and Development segment engages in real estate development activities. WestRock Company is based in Richmond, Virginia.

FINANCIAL RATIOS  of  WestRock (WRK)

Valuation Ratios
P/E Ratio -35.7
Price to Sales 1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 8.4
Price to Free Cash Flow 15.9
Growth Rates
Sales Growth Rate 27.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36%
Cap. Spend. - 3 Yr. Gr. Rate 12.6%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 56.5%
Total Debt to Equity 59.5%
Interest Coverage 2
Management Effectiveness
Return On Assets -1%
Ret/ On Assets - 3 Yr. Avg. 2.4%
Return On Total Capital -2.4%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity -3.7%
Return On Equity - 3 Yr. Avg. 4.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 19.5%
Gross Margin - 3 Yr. Avg. 19.4%
EBITDA Margin 11.4%
EBITDA Margin - 3 Yr. Avg. 13.5%
Operating Margin 3.1%
Oper. Margin - 3 Yr. Avg. 6.4%
Pre-Tax Margin 1.7%
Pre-Tax Margin - 3 Yr. Avg. 5.4%
Net Profit Margin -2.8%
Net Profit Margin - 3 Yr. Avg. 2.2%
Effective Tax Rate 36.7%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio -96.2%

WRK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WRK stock intrinsic value calculation we used $14172 million for the last fiscal year's total revenue generated by WestRock. The default revenue input number comes from 2016 income statement of WestRock. 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 WRK stock valuation model: a) initial revenue growth rate of 4.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for WRK is calculated based on our internal credit rating of WestRock, 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 WestRock.
    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 WRK stock the variable cost ratio is equal to 92.4%.

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 WRK 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 4% for WestRock.

Corporate tax rate of 27% is the nominal tax rate for WestRock. 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 WRK 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 WRK are equal to 84.1%.

Life of production assets of 14.5 years is the average useful life of capital assets used in WestRock 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 WRK is equal to 11.9%. 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 - $9729 million for WestRock - 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 250.55 million for WestRock 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 WestRock at the current share price and the inputted number of shares is $14.1 billion.

RELATED COMPANIES Price Int.Val. Rating
GPK Graphic Packag 13.47 10.85  sell
IP International 54.29 68.52  hold
PKG Packaging of A 109.99 198.53  str.buy

COMPANY NEWS

▶ WestRock Co. Value Analysis (NYSE:WRK) : August 17, 2017   [Aug-16-17 11:22PM  Capital Cube]
▶ WestRock beats Street 3Q forecasts   [06:55AM  Associated Press]
▶ WestRock Acquires Hannapak   [Aug-01-17 06:26AM  GlobeNewswire]
▶ WestRock Announces Quarterly Dividend of $0.40 Per Share   [Jul-28-17 09:45AM  GlobeNewswire]
▶ WestRock Completes Acquisition of Multi Packaging Solutions   [Jun-06-17 10:31AM  GlobeNewswire]
▶ Intuit Was the S&P 500s Top Gainer on May 24   [May-26-17 09:07AM  Market Realist]
▶ Washington County box plant to be acquired   [May-24-17 04:55PM  American City Business Journals]
▶ Which Stocks Are Showing Rising Relative Strength?   [May-23-17 11:15AM  Investor's Business Daily]
▶ 2015 IPO With Triple-Digit EPS Growth Trying To Package New Run   [May-22-17 11:59AM  Investor's Business Daily]
▶ ETFs with exposure to WestRock Co. : May 19, 2017   [May-19-17 02:15PM  Capital Cube]
▶ Which Direction Does WestRock Go From Here?   [May-09-17 01:09PM  TheStreet.com]
▶ WestRock tops Street 2Q forecasts   [06:48AM  Associated Press]
▶ WestRock Co. Value Analysis (NYSE:WRK) : April 21, 2017   [Apr-21-17 03:57PM  Capital Cube]
▶ WestRock Announces Quarterly Dividend of $0.40 Per Share   [Apr-20-17 05:22PM  GlobeNewswire]
▶ WestRock Is a Hot Stock to Buy Now   [Mar-27-17 01:50PM  TheStreet.com]
▶ WestRock Named to Fortunes Worlds Most Admired Company List   [Feb-16-17 12:08PM  GlobeNewswire]
▶ WestRock Announces Quarterly Dividend of $0.40 Per Share   [Jan-27-17 12:08PM  GlobeNewswire]
Stock chart of WRK Financial statements of WRK
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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