Intrinsic value of Ashland Global Holdings Inc. - ASH

Previous Close

$79.65

  Intrinsic Value

$45.93

stock screener

  Rating & Target

sell

-42%

Previous close

$79.65

 
Intrinsic value

$45.93

 
Up/down potential

-42%

 
Rating

sell

We calculate the intrinsic value of ASH 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 5.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,818
  3,906
  4,006
  4,119
  4,244
  4,381
  4,530
  4,691
  4,865
  5,052
  5,252
  5,465
  5,692
  5,933
  6,189
  6,460
  6,747
  7,051
  7,372
  7,710
  8,068
  8,445
  8,842
  9,261
  9,701
  10,166
  10,654
  11,168
  11,709
  12,278
Variable operating expenses, $m
  3,177
  3,242
  3,317
  3,400
  3,493
  3,594
  3,705
  3,824
  3,953
  4,091
  3,890
  4,048
  4,216
  4,395
  4,585
  4,786
  4,998
  5,223
  5,461
  5,712
  5,976
  6,256
  6,550
  6,860
  7,187
  7,531
  7,892
  8,273
  8,674
  9,095
Fixed operating expenses, $m
  419
  428
  438
  447
  457
  467
  477
  488
  499
  510
  521
  532
  544
  556
  568
  581
  594
  607
  620
  634
  648
  662
  676
  691
  706
  722
  738
  754
  771
  788
Total operating expenses, $m
  3,596
  3,670
  3,755
  3,847
  3,950
  4,061
  4,182
  4,312
  4,452
  4,601
  4,411
  4,580
  4,760
  4,951
  5,153
  5,367
  5,592
  5,830
  6,081
  6,346
  6,624
  6,918
  7,226
  7,551
  7,893
  8,253
  8,630
  9,027
  9,445
  9,883
Operating income, $m
  222
  235
  252
  271
  294
  319
  348
  379
  414
  451
  840
  884
  931
  982
  1,036
  1,094
  1,155
  1,221
  1,291
  1,365
  1,444
  1,527
  1,616
  1,709
  1,808
  1,913
  2,024
  2,141
  2,265
  2,395
EBITDA, $m
  782
  801
  823
  849
  878
  911
  948
  988
  1,032
  1,080
  1,132
  1,187
  1,247
  1,311
  1,379
  1,452
  1,529
  1,612
  1,699
  1,792
  1,891
  1,995
  2,106
  2,223
  2,346
  2,477
  2,614
  2,760
  2,914
  3,076
Interest expense (income), $m
  0
  137
  142
  148
  155
  163
  172
  182
  192
  203
  216
  229
  243
  258
  273
  290
  308
  327
  347
  369
  391
  415
  440
  466
  494
  524
  555
  587
  621
  657
  695
Earnings before tax, $m
  85
  93
  104
  116
  131
  147
  166
  187
  210
  235
  612
  642
  674
  708
  746
  786
  828
  874
  922
  974
  1,029
  1,087
  1,149
  1,215
  1,285
  1,359
  1,437
  1,520
  1,607
  1,700
Tax expense, $m
  23
  25
  28
  31
  35
  40
  45
  51
  57
  64
  165
  173
  182
  191
  201
  212
  224
  236
  249
  263
  278
  294
  310
  328
  347
  367
  388
  410
  434
  459
Net income, $m
  62
  68
  76
  85
  95
  108
  121
  137
  153
  172
  447
  468
  492
  517
  544
  573
  605
  638
  673
  711
  751
  794
  839
  887
  938
  992
  1,049
  1,109
  1,173
  1,241

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
  8,428
  8,622
  8,843
  9,092
  9,368
  9,670
  10,000
  10,356
  10,740
  11,152
  11,593
  12,064
  12,565
  13,097
  13,662
  14,261
  14,895
  15,565
  16,273
  17,021
  17,810
  18,642
  19,519
  20,443
  21,416
  22,441
  23,519
  24,654
  25,848
  27,104
Adjusted assets (=assets-cash), $m
  8,428
  8,622
  8,843
  9,092
  9,368
  9,670
  10,000
  10,356
  10,740
  11,152
  11,593
  12,064
  12,565
  13,097
  13,662
  14,261
  14,895
  15,565
  16,273
  17,021
  17,810
  18,642
  19,519
  20,443
  21,416
  22,441
  23,519
  24,654
  25,848
  27,104
Revenue / Adjusted assets
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
  0.453
Average production assets, $m
  3,703
  3,789
  3,886
  3,995
  4,116
  4,249
  4,394
  4,551
  4,719
  4,900
  5,094
  5,301
  5,521
  5,755
  6,003
  6,266
  6,545
  6,839
  7,151
  7,479
  7,826
  8,191
  8,577
  8,983
  9,410
  9,861
  10,335
  10,833
  11,358
  11,910
Working capital, $m
  607
  621
  637
  655
  675
  697
  720
  746
  774
  803
  835
  869
  905
  943
  984
  1,027
  1,073
  1,121
  1,172
  1,226
  1,283
  1,343
  1,406
  1,472
  1,543
  1,616
  1,694
  1,776
  1,862
  1,952
Total debt, $m
  2,632
  2,746
  2,876
  3,022
  3,184
  3,362
  3,556
  3,765
  3,991
  4,234
  4,493
  4,769
  5,064
  5,377
  5,709
  6,061
  6,434
  6,828
  7,245
  7,684
  8,148
  8,637
  9,153
  9,696
  10,269
  10,871
  11,505
  12,173
  12,875
  13,613
Total liabilities, $m
  4,956
  5,070
  5,200
  5,346
  5,508
  5,686
  5,880
  6,089
  6,315
  6,558
  6,817
  7,093
  7,388
  7,701
  8,033
  8,385
  8,758
  9,152
  9,569
  10,008
  10,472
  10,961
  11,477
  12,020
  12,593
  13,195
  13,829
  14,497
  15,199
  15,937
Total equity, $m
  3,472
  3,552
  3,643
  3,746
  3,860
  3,984
  4,120
  4,267
  4,425
  4,595
  4,776
  4,970
  5,177
  5,396
  5,629
  5,875
  6,137
  6,413
  6,704
  7,013
  7,338
  7,680
  8,042
  8,422
  8,823
  9,246
  9,690
  10,157
  10,649
  11,167
Total liabilities and equity, $m
  8,428
  8,622
  8,843
  9,092
  9,368
  9,670
  10,000
  10,356
  10,740
  11,153
  11,593
  12,063
  12,565
  13,097
  13,662
  14,260
  14,895
  15,565
  16,273
  17,021
  17,810
  18,641
  19,519
  20,442
  21,416
  22,441
  23,519
  24,654
  25,848
  27,104
Debt-to-equity ratio
  0.760
  0.770
  0.790
  0.810
  0.830
  0.840
  0.860
  0.880
  0.900
  0.920
  0.940
  0.960
  0.980
  1.000
  1.010
  1.030
  1.050
  1.060
  1.080
  1.100
  1.110
  1.120
  1.140
  1.150
  1.160
  1.180
  1.190
  1.200
  1.210
  1.220
Adjusted equity ratio
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412
  0.412

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  62
  68
  76
  85
  95
  108
  121
  137
  153
  172
  447
  468
  492
  517
  544
  573
  605
  638
  673
  711
  751
  794
  839
  887
  938
  992
  1,049
  1,109
  1,173
  1,241
Depreciation, amort., depletion, $m
  561
  565
  571
  577
  584
  592
  600
  609
  619
  629
  291
  303
  315
  329
  343
  358
  374
  391
  409
  427
  447
  468
  490
  513
  538
  563
  591
  619
  649
  681
Funds from operations, $m
  623
  633
  647
  662
  680
  699
  721
  746
  772
  801
  738
  771
  807
  846
  887
  931
  979
  1,029
  1,082
  1,138
  1,198
  1,262
  1,329
  1,400
  1,476
  1,555
  1,639
  1,728
  1,822
  1,921
Change in working capital, $m
  12
  14
  16
  18
  20
  22
  24
  26
  28
  30
  32
  34
  36
  38
  41
  43
  46
  48
  51
  54
  57
  60
  63
  67
  70
  74
  78
  82
  86
  90
Cash from operations, $m
  611
  619
  631
  644
  660
  678
  698
  720
  744
  771
  706
  737
  771
  808
  847
  888
  933
  980
  1,031
  1,084
  1,141
  1,202
  1,266
  1,334
  1,405
  1,481
  1,562
  1,647
  1,736
  1,831
Maintenance CAPEX, $m
  -207
  -212
  -216
  -222
  -228
  -235
  -243
  -251
  -260
  -270
  -280
  -291
  -303
  -315
  -329
  -343
  -358
  -374
  -391
  -409
  -427
  -447
  -468
  -490
  -513
  -538
  -563
  -591
  -619
  -649
New CAPEX, $m
  -73
  -85
  -97
  -109
  -121
  -133
  -145
  -157
  -169
  -181
  -194
  -207
  -220
  -234
  -248
  -263
  -278
  -294
  -311
  -329
  -347
  -366
  -385
  -406
  -428
  -450
  -474
  -499
  -525
  -552
Cash from investing activities, $m
  -280
  -297
  -313
  -331
  -349
  -368
  -388
  -408
  -429
  -451
  -474
  -498
  -523
  -549
  -577
  -606
  -636
  -668
  -702
  -738
  -774
  -813
  -853
  -896
  -941
  -988
  -1,037
  -1,090
  -1,144
  -1,201
Free cash flow, $m
  331
  323
  317
  313
  310
  309
  310
  312
  316
  320
  232
  240
  248
  258
  270
  282
  296
  312
  329
  347
  367
  389
  412
  438
  465
  493
  524
  557
  593
  630
Issuance/(repayment) of debt, $m
  103
  114
  130
  146
  162
  178
  194
  210
  226
  242
  259
  277
  295
  313
  332
  352
  373
  394
  416
  440
  464
  489
  516
  543
  572
  603
  634
  667
  702
  738
Issuance/(repurchase) of shares, $m
  4
  12
  16
  18
  18
  17
  14
  10
  5
  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  
  107
  126
  146
  164
  180
  195
  208
  220
  231
  242
  259
  277
  295
  313
  332
  352
  373
  394
  416
  440
  464
  489
  516
  543
  572
  603
  634
  667
  702
  738
Total cash flow (excl. dividends), $m
  438
  448
  463
  477
  490
  504
  518
  532
  546
  563
  491
  516
  543
  571
  602
  634
  669
  706
  745
  787
  831
  878
  928
  981
  1,037
  1,096
  1,159
  1,225
  1,295
  1,369
Retained Cash Flow (-), $m
  -66
  -80
  -91
  -102
  -114
  -125
  -136
  -147
  -158
  -170
  -182
  -194
  -206
  -219
  -233
  -247
  -261
  -276
  -292
  -308
  -325
  -343
  -361
  -381
  -401
  -422
  -444
  -468
  -492
  -517
Prev. year cash balance distribution, $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 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
  371
  369
  371
  374
  377
  380
  382
  385
  388
  393
  310
  322
  336
  352
  369
  388
  408
  430
  453
  479
  506
  535
  567
  600
  636
  674
  714
  757
  803
  851
Discount rate, %
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
  346
  319
  295
  272
  248
  224
  201
  178
  156
  136
  91
  80
  69
  59
  50
  42
  34
  27
  22
  17
  13
  10
  7
  5
  3
  2
  2
  1
  1
  0
Current shareholders' claim on cash, %
  99.9
  99.7
  99.4
  99.1
  98.7
  98.4
  98.2
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0
  98.0

Ashland Global Holdings Inc. provides specialty chemical solutions worldwide. It operates through Specialty Ingredients, Performance Materials, and Valvoline segments. The company provides products, technologies, and resources for solving formulation and product-performance challenges. It offers solutions using natural, synthetic, and semisynthetic polymers derived from plant and seed extract, cellulose ethers, vinyl pyrrolidones, and acrylic polymers, as well as polyester and polyurethane-based adhesives. The company offers these solutions for pharmaceutical companies; makers of personal care products, food, and beverages; manufacturers of paint, coatings, and construction materials; packaging and converting markets; and oilfield service companies. It also provides performance materials that include composites, such as polyester and vinyl ester resins, gelcoats, molten maleic anhydride, and low-profile additives; and intermediates and solvents comprising 1,4 butanediol, tetrahydrofuran, and n-methylpyrrolidone. The company markets its performance materials to manufacturers of residential and commercial building products; industrial product specifiers and manufacturers; wind blade and pipe manufacturers; automotive and truck OEM suppliers; boatbuilders; chemical producers; and electronics makers. In addition, it produces and distributes automotive, commercial, and industrial lubricants, and automotive chemicals. The company offers lubricants and automotive chemicals under the Valvoline brand; lubricants for cars with higher mileage engines under the MaxLife brand; synthetic motor oil under the SynPower brand; and antifreeze products under the Zerex brand, as well as operates and franchises 1,068 Valvoline Instant Oil Change centers in the United States. The company was formerly known as Ashland Inc. and changed its name to Ashland Global Holdings Inc. in September 2016. Ashland Global Holdings Inc. was founded in 1924 and is headquartered in Covington, Kentucky.

FINANCIAL RATIOS  of  Ashland Global Holdings Inc. (ASH)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ASH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASH stock intrinsic value calculation we used $3743 million for the last fiscal year's total revenue generated by Ashland Global Holdings Inc.. The default revenue input number comes from 0001 income statement of Ashland Global Holdings 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 ASH stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.2%, whose default value for ASH is calculated based on our internal credit rating of Ashland Global Holdings 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 Ashland Global Holdings 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 ASH stock the variable cost ratio is equal to 83.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $410 million in the base year in the intrinsic value calculation for ASH 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 Ashland Global Holdings Inc..

Corporate tax rate of 27% is the nominal tax rate for Ashland Global Holdings 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 ASH 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 ASH are equal to 97%.

Life of production assets of 17.5 years is the average useful life of capital assets used in Ashland Global Holdings 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 ASH is equal to 15.9%. 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 - $3406 million for Ashland Global Holdings 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 62.580 million for Ashland Global Holdings 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 Ashland Global Holdings Inc. at the current share price and the inputted number of shares is $5.0 billion.

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