Intrinsic value of Alexander & Baldwin, Inc. - ALEX

Previous Close

$22.83

  Intrinsic Value

$206.28

stock screener

  Rating & Target

str. buy

+804%

Previous close

$22.83

 
Intrinsic value

$206.28

 
Up/down potential

+804%

 
Rating

str. buy

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

We calculate the intrinsic value of ALEX 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 0001), $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 1.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,030
  1,592
  2,381
  3,454
  4,874
  6,700
  8,994
  11,809
  15,195
  19,193
  23,834
  29,139
  35,122
  41,788
  49,136
  57,156
  65,839
  75,171
  85,135
  95,717
  106,903
  118,681
  131,043
  143,983
  157,499
  171,593
  186,270
  201,541
  217,420
  233,923
Variable operating expenses, $m
  345
  526
  780
  1,126
  1,584
  2,172
  2,911
  3,818
  4,909
  6,197
  7,679
  9,388
  11,316
  13,464
  15,831
  18,415
  21,213
  24,219
  27,430
  30,839
  34,443
  38,238
  42,221
  46,390
  50,745
  55,286
  60,015
  64,935
  70,051
  75,368
Fixed operating expenses, $m
  263
  268
  274
  280
  287
  293
  299
  306
  313
  319
  327
  334
  341
  349
  356
  364
  372
  380
  389
  397
  406
  415
  424
  433
  443
  453
  462
  473
  483
  494
Total operating expenses, $m
  608
  794
  1,054
  1,406
  1,871
  2,465
  3,210
  4,124
  5,222
  6,516
  8,006
  9,722
  11,657
  13,813
  16,187
  18,779
  21,585
  24,599
  27,819
  31,236
  34,849
  38,653
  42,645
  46,823
  51,188
  55,739
  60,477
  65,408
  70,534
  75,862
Operating income, $m
  422
  797
  1,326
  2,048
  3,003
  4,235
  5,783
  7,685
  9,974
  12,676
  15,828
  19,417
  23,465
  27,976
  32,948
  38,377
  44,254
  50,571
  57,316
  64,480
  72,054
  80,028
  88,398
  97,160
  106,311
  115,854
  125,793
  136,134
  146,886
  158,061
EBITDA, $m
  513
  930
  1,517
  2,319
  3,381
  4,749
  6,468
  8,581
  11,122
  14,124
  17,608
  21,593
  26,089
  31,097
  36,619
  42,647
  49,173
  56,186
  63,676
  71,630
  80,039
  88,894
  98,187
  107,915
  118,077
  128,672
  139,707
  151,189
  163,127
  175,535
Interest expense (income), $m
  26
  42
  74
  120
  185
  274
  390
  541
  730
  962
  1,241
  1,570
  1,953
  2,390
  2,883
  3,432
  4,037
  4,698
  5,414
  6,182
  7,003
  7,875
  8,797
  9,767
  10,786
  11,852
  12,966
  14,127
  15,336
  16,595
  17,903
Earnings before tax, $m
  380
  723
  1,206
  1,863
  2,730
  3,845
  5,242
  6,955
  9,012
  11,435
  14,258
  17,464
  21,075
  25,093
  29,516
  34,340
  39,556
  45,157
  51,134
  57,477
  64,178
  71,231
  78,631
  86,374
  94,459
  102,889
  111,666
  120,797
  130,291
  140,158
Tax expense, $m
  103
  195
  326
  503
  737
  1,038
  1,415
  1,878
  2,433
  3,088
  3,850
  4,715
  5,690
  6,775
  7,969
  9,272
  10,680
  12,192
  13,806
  15,519
  17,328
  19,232
  21,230
  23,321
  25,504
  27,780
  30,150
  32,615
  35,179
  37,843
Net income, $m
  278
  528
  880
  1,360
  1,993
  2,807
  3,827
  5,077
  6,579
  8,348
  10,408
  12,749
  15,385
  18,318
  21,547
  25,068
  28,876
  32,965
  37,328
  41,958
  46,850
  51,999
  57,400
  63,053
  68,955
  75,109
  81,516
  88,182
  95,112
  102,315

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  3,324
  5,135
  7,680
  11,143
  15,721
  21,613
  29,012
  38,094
  49,018
  61,913
  76,882
  93,996
  113,297
  134,801
  158,502
  184,376
  212,385
  242,486
  274,628
  308,763
  344,847
  382,843
  422,720
  464,462
  508,062
  553,526
  600,872
  650,133
  701,353
  754,590
Adjusted assets (=assets-cash), $m
  3,324
  5,135
  7,680
  11,143
  15,721
  21,613
  29,012
  38,094
  49,018
  61,913
  76,882
  93,996
  113,297
  134,801
  158,502
  184,376
  212,385
  242,486
  274,628
  308,763
  344,847
  382,843
  422,720
  464,462
  508,062
  553,526
  600,872
  650,133
  701,353
  754,590
Revenue / Adjusted assets
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
Average production assets, $m
  2,309
  3,568
  5,335
  7,741
  10,922
  15,015
  20,155
  26,464
  34,053
  43,012
  53,411
  65,300
  78,708
  93,648
  110,113
  128,088
  147,546
  168,457
  190,787
  214,501
  239,569
  265,965
  293,668
  322,667
  352,956
  384,540
  417,432
  451,654
  487,237
  524,221
Working capital, $m
  -232
  -358
  -536
  -777
  -1,097
  -1,508
  -2,024
  -2,657
  -3,419
  -4,318
  -5,363
  -6,556
  -7,902
  -9,402
  -11,056
  -12,860
  -14,814
  -16,913
  -19,155
  -21,536
  -24,053
  -26,703
  -29,485
  -32,396
  -35,437
  -38,608
  -41,911
  -45,347
  -48,919
  -52,633
Total debt, $m
  1,367
  2,224
  3,427
  5,065
  7,231
  10,018
  13,517
  17,813
  22,980
  29,080
  36,160
  44,255
  53,384
  63,555
  74,766
  87,004
  100,253
  114,490
  129,693
  145,839
  162,907
  180,879
  199,741
  219,485
  240,108
  261,612
  284,007
  307,307
  331,535
  356,716
Total liabilities, $m
  1,572
  2,429
  3,633
  5,271
  7,436
  10,223
  13,722
  18,018
  23,185
  29,285
  36,365
  44,460
  53,589
  63,761
  74,971
  87,210
  100,458
  114,696
  129,899
  146,045
  163,113
  181,085
  199,947
  219,691
  240,313
  261,818
  284,213
  307,513
  331,740
  356,921
Total equity, $m
  1,752
  2,706
  4,047
  5,872
  8,285
  11,390
  15,289
  20,076
  25,832
  32,628
  40,517
  49,536
  59,707
  71,040
  83,530
  97,166
  111,927
  127,790
  144,729
  162,718
  181,734
  201,758
  222,774
  244,772
  267,749
  291,708
  316,660
  342,620
  369,613
  397,669
Total liabilities and equity, $m
  3,324
  5,135
  7,680
  11,143
  15,721
  21,613
  29,011
  38,094
  49,017
  61,913
  76,882
  93,996
  113,296
  134,801
  158,501
  184,376
  212,385
  242,486
  274,628
  308,763
  344,847
  382,843
  422,721
  464,463
  508,062
  553,526
  600,873
  650,133
  701,353
  754,590
Debt-to-equity ratio
  0.780
  0.820
  0.850
  0.860
  0.870
  0.880
  0.880
  0.890
  0.890
  0.890
  0.890
  0.890
  0.890
  0.890
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
  0.900
Adjusted equity ratio
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  278
  528
  880
  1,360
  1,993
  2,807
  3,827
  5,077
  6,579
  8,348
  10,408
  12,749
  15,385
  18,318
  21,547
  25,068
  28,876
  32,965
  37,328
  41,958
  46,850
  51,999
  57,400
  63,053
  68,955
  75,109
  81,516
  88,182
  95,112
  102,315
Depreciation, amort., depletion, $m
  90
  132
  191
  271
  377
  514
  685
  896
  1,149
  1,447
  1,780
  2,177
  2,624
  3,122
  3,670
  4,270
  4,918
  5,615
  6,360
  7,150
  7,986
  8,865
  9,789
  10,756
  11,765
  12,818
  13,914
  15,055
  16,241
  17,474
Funds from operations, $m
  368
  660
  1,072
  1,631
  2,370
  3,321
  4,512
  5,973
  7,727
  9,795
  12,189
  14,926
  18,009
  21,440
  25,217
  29,338
  33,794
  38,580
  43,687
  49,108
  54,836
  60,864
  67,189
  73,808
  80,720
  87,927
  95,431
  103,237
  111,354
  119,789
Change in working capital, $m
  -87
  -126
  -177
  -242
  -319
  -411
  -516
  -634
  -762
  -899
  -1,044
  -1,194
  -1,346
  -1,500
  -1,653
  -1,805
  -1,954
  -2,099
  -2,242
  -2,381
  -2,517
  -2,650
  -2,781
  -2,912
  -3,041
  -3,171
  -3,302
  -3,436
  -3,573
  -3,713
Cash from operations, $m
  455
  787
  1,249
  1,873
  2,690
  3,732
  5,028
  6,606
  8,489
  10,694
  13,233
  16,119
  19,355
  22,939
  26,870
  31,142
  35,748
  40,680
  45,929
  51,489
  57,353
  63,514
  69,971
  76,720
  83,761
  91,098
  98,733
  106,673
  114,926
  123,503
Maintenance CAPEX, $m
  -48
  -77
  -119
  -178
  -258
  -364
  -501
  -672
  -882
  -1,135
  -1,434
  -1,780
  -2,177
  -2,624
  -3,122
  -3,670
  -4,270
  -4,918
  -5,615
  -6,360
  -7,150
  -7,986
  -8,865
  -9,789
  -10,756
  -11,765
  -12,818
  -13,914
  -15,055
  -16,241
New CAPEX, $m
  -866
  -1,258
  -1,768
  -2,406
  -3,181
  -4,093
  -5,140
  -6,310
  -7,589
  -8,959
  -10,399
  -11,889
  -13,408
  -14,939
  -16,465
  -17,975
  -19,459
  -20,911
  -22,329
  -23,714
  -25,068
  -26,396
  -27,704
  -28,999
  -30,289
  -31,584
  -32,892
  -34,222
  -35,583
  -36,984
Cash from investing activities, $m
  -914
  -1,335
  -1,887
  -2,584
  -3,439
  -4,457
  -5,641
  -6,982
  -8,471
  -10,094
  -11,833
  -13,669
  -15,585
  -17,563
  -19,587
  -21,645
  -23,729
  -25,829
  -27,944
  -30,074
  -32,218
  -34,382
  -36,569
  -38,788
  -41,045
  -43,349
  -45,710
  -48,136
  -50,638
  -53,225
Free cash flow, $m
  -459
  -549
  -638
  -711
  -749
  -726
  -612
  -375
  18
  601
  1,400
  2,450
  3,770
  5,377
  7,284
  9,497
  12,020
  14,850
  17,985
  21,415
  25,134
  29,133
  33,402
  37,932
  42,717
  47,749
  53,023
  58,537
  64,288
  70,277
Issuance/(repayment) of debt, $m
  589
  857
  1,204
  1,638
  2,166
  2,787
  3,499
  4,296
  5,167
  6,100
  7,080
  8,095
  9,129
  10,171
  11,211
  12,238
  13,249
  14,237
  15,203
  16,146
  17,068
  17,972
  18,862
  19,744
  20,623
  21,504
  22,395
  23,300
  24,227
  25,181
Issuance/(repurchase) of shares, $m
  377
  427
  461
  465
  420
  298
  72
  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  
  966
  1,284
  1,665
  2,103
  2,586
  3,085
  3,571
  4,296
  5,167
  6,100
  7,080
  8,095
  9,129
  10,171
  11,211
  12,238
  13,249
  14,237
  15,203
  16,146
  17,068
  17,972
  18,862
  19,744
  20,623
  21,504
  22,395
  23,300
  24,227
  25,181
Total cash flow (excl. dividends), $m
  507
  735
  1,027
  1,392
  1,836
  2,360
  2,959
  3,921
  5,185
  6,700
  8,480
  10,545
  12,899
  15,548
  18,494
  21,735
  25,268
  29,088
  33,188
  37,561
  42,202
  47,105
  52,264
  57,676
  63,339
  69,253
  75,418
  81,837
  88,515
  95,458
Retained Cash Flow (-), $m
  -655
  -955
  -1,341
  -1,825
  -2,413
  -3,105
  -3,899
  -4,786
  -5,757
  -6,796
  -7,889
  -9,019
  -10,172
  -11,333
  -12,490
  -13,636
  -14,761
  -15,863
  -16,939
  -17,989
  -19,016
  -20,024
  -21,016
  -21,998
  -22,977
  -23,959
  -24,952
  -25,961
  -26,993
  -28,056
Prev. year cash balance distribution, $m
  106
  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
  -43
  -220
  -314
  -433
  -576
  -745
  -939
  -866
  -572
  -96
  591
  1,526
  2,727
  4,216
  6,004
  8,100
  10,507
  13,225
  16,249
  19,572
  23,186
  27,081
  31,248
  35,678
  40,362
  45,294
  50,466
  55,876
  61,522
  67,403
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -41
  -201
  -274
  -356
  -447
  -541
  -635
  -541
  -329
  -50
  281
  651
  1,037
  1,415
  1,763
  2,058
  2,286
  2,436
  2,502
  2,487
  2,398
  2,247
  2,048
  1,817
  1,570
  1,321
  1,083
  864
  672
  508
Current shareholders' claim on cash, %
  80.0
  67.9
  60.4
  55.7
  53.0
  51.6
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4
  51.4

Alexander & Baldwin, Inc. (A&B) is a real estate company. The Company operates through three segments: Commercial Real Estate, Land Operations, and Materials and Construction. In addition to its 15 retail centers in Hawaii, the Company owned seven industrial assets, seven office properties and a portfolio of urban ground leases comprising 106 acres in Hawaii, as of December 31, 2016. On the United States mainland, the Company owned seven remaining commercial assets, as of December 31, 2016. The Commercial Real Estate segment owns, operates and manages retail, industrial and office properties in Hawaii and on the Mainland. The Land Operations segment manages the Company's land and real estate-related assets and deploys these assets to their use. The Materials and Construction segment performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells basalt aggregate, and produces and sells asphaltic and ready-mix concrete.

FINANCIAL RATIOS  of  Alexander & Baldwin, Inc. (ALEX)

Valuation Ratios
P/E Ratio -111.9
Price to Sales 2.9
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 10.1
Price to Free Cash Flow -223.7
Growth Rates
Sales Growth Rate -18%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 157.8%
Cap. Spend. - 3 Yr. Gr. Rate -25.5%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 39.1%
Total Debt to Equity 42.6%
Interest Coverage 2
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. 2.2%
Return On Total Capital -0.6%
Ret/ On T. Cap. - 3 Yr. Avg. 1.4%
Return On Equity -0.8%
Return On Equity - 3 Yr. Avg. 2.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 30.7%
Gross Margin - 3 Yr. Avg. 30%
EBITDA Margin 46.6%
EBITDA Margin - 3 Yr. Avg. 37.4%
Operating Margin 10.8%
Oper. Margin - 3 Yr. Avg. 15.5%
Pre-Tax Margin 9%
Pre-Tax Margin - 3 Yr. Avg. 12.8%
Net Profit Margin -2.6%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 5.7%
Eff/ Tax Rate - 3 Yr. Avg. 17.5%
Payout Ratio -120%

ALEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALEX stock intrinsic value calculation we used $644 million for the last fiscal year's total revenue generated by Alexander & Baldwin, Inc.. The default revenue input number comes from 0001 income statement of Alexander & Baldwin, Inc.. 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 ALEX stock valuation model: a) initial revenue growth rate of 60% 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 4.3%, whose default value for ALEX is calculated based on our internal credit rating of Alexander & Baldwin, Inc., 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 Alexander & Baldwin, Inc..
    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 ALEX stock the variable cost ratio is equal to 34.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $257 million in the base year in the intrinsic value calculation for ALEX 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 5.4% for Alexander & Baldwin, Inc..

Corporate tax rate of 27% is the nominal tax rate for Alexander & Baldwin, Inc.. 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 ALEX 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 ALEX are equal to 224.1%.

Life of production assets of 35.4 years is the average useful life of capital assets used in Alexander & Baldwin, Inc. 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 ALEX is equal to -22.5%. 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 - $1202.6 million for Alexander & Baldwin, Inc. - 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 72.201 million for Alexander & Baldwin, Inc. 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 Alexander & Baldwin, Inc. at the current share price and the inputted number of shares is $1.6 billion.

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