Intrinsic value of Weyerhaeuser - WY

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$34.56

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$34.56

 
Intrinsic value

$13.97

 
Up/down potential

-60%

 
Rating

str. sell

 
Value-price divergence* premium content

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Our model is not good at valuating stocks of financial companies, such as WY.

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

We calculate the intrinsic value of WY 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 26.0

 

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, %
  21.33
  26.10
  23.99
  22.09
  20.38
  18.84
  17.46
  16.21
  15.09
  14.08
  13.17
  12.36
  11.62
  10.96
  10.36
  9.83
  9.34
  8.91
  8.52
  8.17
  7.85
  7.57
  7.31
  7.08
  6.87
  6.68
  6.51
  6.36
  6.23
  6.10
  5.99
Revenue, $m
  6,365
  8,026
  9,952
  12,150
  14,627
  17,383
  20,418
  23,728
  27,309
  31,155
  35,260
  39,617
  44,221
  49,067
  54,152
  59,474
  65,031
  70,825
  76,859
  83,136
  89,662
  96,446
  103,494
  110,820
  118,433
  126,348
  134,579
  143,143
  152,056
  161,338
  171,009
Variable operating expenses, $m
 
  6,508
  8,069
  9,850
  11,857
  14,091
  16,550
  19,233
  22,135
  25,251
  28,578
  32,104
  35,835
  39,763
  43,883
  48,196
  52,699
  57,395
  62,284
  67,371
  72,660
  78,157
  83,869
  89,805
  95,975
  102,389
  109,059
  115,999
  123,222
  130,744
  138,581
Fixed operating expenses, $m
 
  353
  361
  370
  380
  389
  399
  409
  419
  430
  440
  451
  463
  474
  486
  498
  511
  523
  537
  550
  564
  578
  592
  607
  622
  638
  654
  670
  687
  704
  722
Total operating expenses, $m
  5,495
  6,861
  8,430
  10,220
  12,237
  14,480
  16,949
  19,642
  22,554
  25,681
  29,018
  32,555
  36,298
  40,237
  44,369
  48,694
  53,210
  57,918
  62,821
  67,921
  73,224
  78,735
  84,461
  90,412
  96,597
  103,027
  109,713
  116,669
  123,909
  131,448
  139,303
Operating income, $m
  870
  1,165
  1,522
  1,930
  2,390
  2,903
  3,469
  4,087
  4,755
  5,474
  6,242
  7,061
  7,923
  8,830
  9,783
  10,780
  11,821
  12,907
  14,038
  15,215
  16,439
  17,711
  19,033
  20,408
  21,836
  23,321
  24,866
  26,474
  28,147
  29,890
  31,707
EBITDA, $m
  1,435
  1,568
  2,019
  2,536
  3,119
  3,769
  4,486
  5,268
  6,114
  7,024
  7,995
  9,026
  10,116
  11,264
  12,469
  13,730
  15,047
  16,420
  17,850
  19,339
  20,886
  22,495
  24,167
  25,904
  27,710
  29,588
  31,542
  33,574
  35,689
  37,893
  40,189
Interest expense (income), $m
  446
  492
  676
  889
  1,132
  1,406
  1,711
  2,047
  2,413
  2,809
  3,235
  3,689
  4,171
  4,680
  5,216
  5,779
  6,367
  6,982
  7,623
  8,291
  8,985
  9,707
  10,457
  11,237
  12,048
  12,890
  13,765
  14,676
  15,623
  16,609
  17,636
Earnings before tax, $m
  504
  673
  846
  1,040
  1,258
  1,497
  1,758
  2,040
  2,342
  2,665
  3,007
  3,372
  3,752
  4,150
  4,566
  5,001
  5,454
  5,925
  6,415
  6,924
  7,454
  8,004
  8,576
  9,170
  9,789
  10,432
  11,101
  11,798
  12,524
  13,281
  14,070
Tax expense, $m
  89
  182
  228
  281
  340
  404
  475
  551
  632
  720
  812
  911
  1,013
  1,121
  1,233
  1,350
  1,472
  1,600
  1,732
  1,870
  2,013
  2,161
  2,315
  2,476
  2,643
  2,817
  2,997
  3,185
  3,382
  3,586
  3,799
Net income, $m
  1,027
  491
  617
  760
  918
  1,093
  1,283
  1,489
  1,710
  1,945
  2,195
  2,462
  2,739
  3,030
  3,334
  3,651
  3,981
  4,325
  4,683
  5,055
  5,441
  5,843
  6,260
  6,694
  7,146
  7,615
  8,104
  8,613
  9,143
  9,695
  10,271

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  676
  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
  19,243
  23,400
  29,014
  35,423
  42,643
  50,679
  59,527
  69,178
  79,619
  90,832
  102,798
  115,501
  128,924
  143,053
  157,878
  173,393
  189,595
  206,488
  224,078
  242,379
  261,406
  281,182
  301,733
  323,089
  345,286
  368,362
  392,360
  417,327
  443,313
  470,374
  498,568
Adjusted assets (=assets-cash), $m
  18,567
  23,400
  29,014
  35,423
  42,643
  50,679
  59,527
  69,178
  79,619
  90,832
  102,798
  115,501
  128,924
  143,053
  157,878
  173,393
  189,595
  206,488
  224,078
  242,379
  261,406
  281,182
  301,733
  323,089
  345,286
  368,362
  392,360
  417,327
  443,313
  470,374
  498,568
Revenue / Adjusted assets
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
Average production assets, $m
  1,576
  1,991
  2,468
  3,013
  3,627
  4,311
  5,064
  5,885
  6,773
  7,726
  8,744
  9,825
  10,967
  12,169
  13,430
  14,749
  16,128
  17,565
  19,061
  20,618
  22,236
  23,918
  25,667
  27,483
  29,371
  31,334
  33,376
  35,499
  37,710
  40,012
  42,410
Working capital, $m
  416
  24
  30
  36
  44
  52
  61
  71
  82
  93
  106
  119
  133
  147
  162
  178
  195
  212
  231
  249
  269
  289
  310
  332
  355
  379
  404
  429
  456
  484
  513
Total debt, $m
  7,122
  9,391
  12,349
  15,727
  19,532
  23,767
  28,430
  33,516
  39,018
  44,927
  51,234
  57,928
  65,002
  72,448
  80,261
  88,437
  96,976
  105,878
  115,148
  124,793
  134,820
  145,242
  156,072
  167,327
  179,025
  191,186
  203,832
  216,990
  230,685
  244,946
  259,804
Total liabilities, $m
  10,063
  12,332
  15,290
  18,668
  22,473
  26,708
  31,371
  36,457
  41,959
  47,868
  54,175
  60,869
  67,943
  75,389
  83,202
  91,378
  99,917
  108,819
  118,089
  127,734
  137,761
  148,183
  159,013
  170,268
  181,966
  194,127
  206,773
  219,931
  233,626
  247,887
  262,745
Total equity, $m
  9,180
  11,068
  13,724
  16,755
  20,170
  23,971
  28,156
  32,721
  37,660
  42,963
  48,624
  54,632
  60,981
  67,664
  74,676
  82,015
  89,679
  97,669
  105,989
  114,645
  123,645
  132,999
  142,720
  152,821
  163,320
  174,235
  185,586
  197,395
  209,687
  222,487
  235,823
Total liabilities and equity, $m
  19,243
  23,400
  29,014
  35,423
  42,643
  50,679
  59,527
  69,178
  79,619
  90,831
  102,799
  115,501
  128,924
  143,053
  157,878
  173,393
  189,596
  206,488
  224,078
  242,379
  261,406
  281,182
  301,733
  323,089
  345,286
  368,362
  392,359
  417,326
  443,313
  470,374
  498,568
Debt-to-equity ratio
  0.776
  0.850
  0.900
  0.940
  0.970
  0.990
  1.010
  1.020
  1.040
  1.050
  1.050
  1.060
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
Adjusted equity ratio
  0.458
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,027
  491
  617
  760
  918
  1,093
  1,283
  1,489
  1,710
  1,945
  2,195
  2,462
  2,739
  3,030
  3,334
  3,651
  3,981
  4,325
  4,683
  5,055
  5,441
  5,843
  6,260
  6,694
  7,146
  7,615
  8,104
  8,613
  9,143
  9,695
  10,271
Depreciation, amort., depletion, $m
  565
  402
  498
  607
  729
  866
  1,017
  1,181
  1,359
  1,549
  1,753
  1,965
  2,193
  2,434
  2,686
  2,950
  3,226
  3,513
  3,812
  4,124
  4,447
  4,784
  5,133
  5,497
  5,874
  6,267
  6,675
  7,100
  7,542
  8,002
  8,482
Funds from operations, $m
  697
  893
  1,115
  1,366
  1,648
  1,959
  2,300
  2,670
  3,068
  3,495
  3,948
  4,427
  4,932
  5,463
  6,019
  6,601
  7,207
  7,838
  8,495
  9,178
  9,889
  10,627
  11,394
  12,191
  13,020
  13,882
  14,779
  15,712
  16,685
  17,698
  18,753
Change in working capital, $m
  -38
  5
  6
  7
  7
  8
  9
  10
  11
  12
  12
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
Cash from operations, $m
  735
  1,087
  1,109
  1,360
  1,640
  1,951
  2,291
  2,660
  3,058
  3,483
  3,936
  4,414
  4,919
  5,449
  6,004
  6,585
  7,190
  7,821
  8,477
  9,159
  9,869
  10,606
  11,373
  12,169
  12,997
  13,858
  14,754
  15,687
  16,658
  17,670
  18,724
Maintenance CAPEX, $m
  0
  -315
  -398
  -494
  -603
  -725
  -862
  -1,013
  -1,177
  -1,355
  -1,545
  -1,749
  -1,965
  -2,193
  -2,434
  -2,686
  -2,950
  -3,226
  -3,513
  -3,812
  -4,124
  -4,447
  -4,784
  -5,133
  -5,497
  -5,874
  -6,267
  -6,675
  -7,100
  -7,542
  -8,002
New CAPEX, $m
  -510
  -415
  -478
  -545
  -614
  -684
  -753
  -821
  -888
  -954
  -1,018
  -1,081
  -1,142
  -1,202
  -1,261
  -1,320
  -1,378
  -1,437
  -1,496
  -1,557
  -1,619
  -1,682
  -1,748
  -1,817
  -1,888
  -1,963
  -2,041
  -2,124
  -2,211
  -2,302
  -2,398
Cash from investing activities, $m
  2,559
  -730
  -876
  -1,039
  -1,217
  -1,409
  -1,615
  -1,834
  -2,065
  -2,309
  -2,563
  -2,830
  -3,107
  -3,395
  -3,695
  -4,006
  -4,328
  -4,663
  -5,009
  -5,369
  -5,743
  -6,129
  -6,532
  -6,950
  -7,385
  -7,837
  -8,308
  -8,799
  -9,311
  -9,844
  -10,400
Free cash flow, $m
  3,294
  358
  233
  321
  423
  542
  676
  826
  993
  1,175
  1,373
  1,584
  1,812
  2,054
  2,309
  2,579
  2,862
  3,158
  3,468
  3,791
  4,127
  4,477
  4,841
  5,219
  5,612
  6,021
  6,446
  6,888
  7,347
  7,826
  8,324
Issuance/(repayment) of debt, $m
  -725
  2,551
  2,958
  3,378
  3,805
  4,235
  4,663
  5,086
  5,502
  5,909
  6,306
  6,694
  7,074
  7,446
  7,813
  8,176
  8,539
  8,902
  9,270
  9,644
  10,027
  10,422
  10,830
  11,255
  11,698
  12,161
  12,647
  13,158
  13,695
  14,261
  14,858
Issuance/(repurchase) of shares, $m
  -1,942
  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  
  -2,676
  2,551
  2,958
  3,378
  3,805
  4,235
  4,663
  5,086
  5,502
  5,909
  6,306
  6,694
  7,074
  7,446
  7,813
  8,176
  8,539
  8,902
  9,270
  9,644
  10,027
  10,422
  10,830
  11,255
  11,698
  12,161
  12,647
  13,158
  13,695
  14,261
  14,858
Total cash flow (excl. dividends), $m
  618
  2,909
  3,192
  3,699
  4,228
  4,776
  5,339
  5,913
  6,495
  7,084
  7,679
  8,279
  8,886
  9,500
  10,122
  10,755
  11,401
  12,061
  12,738
  13,435
  14,154
  14,899
  15,671
  16,474
  17,310
  18,182
  19,093
  20,045
  21,042
  22,087
  23,182
Retained Cash Flow (-), $m
  -4,311
  -2,282
  -2,655
  -3,032
  -3,415
  -3,801
  -4,185
  -4,565
  -4,938
  -5,304
  -5,660
  -6,008
  -6,349
  -6,683
  -7,012
  -7,338
  -7,664
  -7,990
  -8,320
  -8,656
  -9,000
  -9,354
  -9,721
  -10,102
  -10,499
  -10,915
  -11,351
  -11,809
  -12,292
  -12,800
  -13,336
Prev. year cash balance distribution, $m
 
  394
  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
 
  1,020
  537
  667
  813
  975
  1,154
  1,347
  1,556
  1,780
  2,019
  2,270
  2,537
  2,817
  3,110
  3,417
  3,737
  4,070
  4,418
  4,779
  5,154
  5,545
  5,950
  6,372
  6,811
  7,267
  7,742
  8,236
  8,751
  9,287
  9,846
Discount rate, %
 
  7.80
  8.19
  8.60
  9.03
  9.48
  9.95
  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
  26.41
  27.73
  29.12
  30.58
  32.11
PV of cash for distribution, $m
 
  946
  458
  521
  575
  620
  653
  672
  677
  667
  644
  609
  564
  512
  455
  396
  337
  281
  229
  182
  141
  107
  79
  56
  39
  27
  17
  11
  7
  4
  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

Weyerhaeuser Co. is a real estate investment trust. It primarily invests in United States. The firm operates under four business segments, timberlands, wood products, cellulose fibers and real estate. It owns timberlands primarily in the U.S and has long-term licenses in Canada. The firm manufactures wood and specialty cellulose fibers products, and develops real estate, primarily as a builder of single-family homes. Weyerhaeuser Co was founded in 1900 and is based in Seattle, Washington.

FINANCIAL RATIOS  of  Weyerhaeuser (WY)

Valuation Ratios
P/E Ratio 25.2
Price to Sales 4.1
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 35.2
Price to Free Cash Flow 115
Growth Rates
Sales Growth Rate 21.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.6%
Cap. Spend. - 3 Yr. Gr. Rate 11.7%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 74.5%
Total Debt to Equity 77.6%
Interest Coverage 2
Management Effectiveness
Return On Assets 8.7%
Ret/ On Assets - 3 Yr. Avg. 10.3%
Return On Total Capital 7.8%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 14.6%
Return On Equity - 3 Yr. Avg. 18.3%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 22.6%
Gross Margin - 3 Yr. Avg. 22.6%
EBITDA Margin 23.8%
EBITDA Margin - 3 Yr. Avg. 24.6%
Operating Margin 13.7%
Oper. Margin - 3 Yr. Avg. 14.7%
Pre-Tax Margin 7.9%
Pre-Tax Margin - 3 Yr. Avg. 9.1%
Net Profit Margin 16.1%
Net Profit Margin - 3 Yr. Avg. 19.7%
Effective Tax Rate 17.7%
Eff/ Tax Rate - 3 Yr. Avg. 3.9%
Payout Ratio 92.9%

WY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WY stock intrinsic value calculation we used $6365 million for the last fiscal year's total revenue generated by Weyerhaeuser. The default revenue input number comes from 2016 income statement of Weyerhaeuser. 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 WY stock valuation model: a) initial revenue growth rate of 26.1% 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 7.8%, whose default value for WY is calculated based on our internal credit rating of Weyerhaeuser, 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 Weyerhaeuser.
    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 WY stock the variable cost ratio is equal to 81.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $344 million in the base year in the intrinsic value calculation for WY 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 7.2% for Weyerhaeuser.

Corporate tax rate of 27% is the nominal tax rate for Weyerhaeuser. 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 WY 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 WY are equal to 24.8%.

Life of production assets of 2.9 years is the average useful life of capital assets used in Weyerhaeuser 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 WY is equal to 0.3%. 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 - $9180 million for Weyerhaeuser - 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 751.03 million for Weyerhaeuser 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 Weyerhaeuser at the current share price and the inputted number of shares is $26.0 billion.


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Stock chart of WY Financial statements of WY
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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