Intrinsic value of AptarGroup, Inc. - ATR

Previous Close

$120.88

  Intrinsic Value

$27.60

stock screener

  Rating & Target

str. sell

-77%

Previous close

$120.88

 
Intrinsic value

$27.60

 
Up/down potential

-77%

 
Rating

str. sell

We calculate the intrinsic value of ATR 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 7.6

 

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, %
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.82
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
Revenue, $m
  3,025
  3,296
  3,578
  3,872
  4,177
  4,495
  4,824
  5,167
  5,523
  5,894
  6,279
  6,680
  7,097
  7,531
  7,983
  8,455
  8,946
  9,459
  9,995
  10,554
  11,138
  11,748
  12,387
  13,054
  13,753
  14,484
  15,249
  16,051
  16,890
  17,770
Variable operating expenses, $m
  2,620
  2,846
  3,081
  3,326
  3,581
  3,845
  4,120
  4,406
  4,703
  5,012
  5,237
  5,571
  5,919
  6,281
  6,658
  7,051
  7,461
  7,889
  8,336
  8,802
  9,289
  9,798
  10,331
  10,888
  11,470
  12,080
  12,718
  13,387
  14,087
  14,821
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
  2,620
  2,846
  3,081
  3,326
  3,581
  3,845
  4,120
  4,406
  4,703
  5,012
  5,237
  5,571
  5,919
  6,281
  6,658
  7,051
  7,461
  7,889
  8,336
  8,802
  9,289
  9,798
  10,331
  10,888
  11,470
  12,080
  12,718
  13,387
  14,087
  14,821
Operating income, $m
  405
  450
  497
  546
  597
  649
  704
  761
  820
  882
  1,042
  1,109
  1,178
  1,250
  1,325
  1,403
  1,485
  1,570
  1,659
  1,752
  1,849
  1,950
  2,056
  2,167
  2,283
  2,404
  2,531
  2,664
  2,803
  2,949
EBITDA, $m
  648
  706
  766
  829
  895
  962
  1,033
  1,106
  1,183
  1,262
  1,345
  1,430
  1,520
  1,613
  1,709
  1,810
  1,916
  2,026
  2,140
  2,260
  2,385
  2,516
  2,652
  2,795
  2,945
  3,102
  3,265
  3,437
  3,617
  3,805
Interest expense (income), $m
  36
  47
  99
  153
  210
  269
  330
  394
  460
  529
  600
  675
  752
  832
  916
  1,003
  1,094
  1,189
  1,287
  1,390
  1,498
  1,610
  1,728
  1,850
  1,978
  2,112
  2,253
  2,399
  2,553
  2,714
  2,882
Earnings before tax, $m
  359
  352
  344
  336
  328
  319
  310
  301
  291
  281
  367
  357
  345
  334
  322
  309
  296
  282
  268
  254
  238
  222
  206
  188
  170
  151
  132
  111
  89
  67
Tax expense, $m
  97
  95
  93
  91
  89
  86
  84
  81
  79
  76
  99
  96
  93
  90
  87
  83
  80
  76
  72
  68
  64
  60
  56
  51
  46
  41
  36
  30
  24
  18
Net income, $m
  262
  257
  251
  245
  239
  233
  227
  220
  213
  205
  268
  260
  252
  244
  235
  226
  216
  206
  196
  185
  174
  162
  150
  138
  124
  111
  96
  81
  65
  49

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
  3,693
  4,024
  4,369
  4,728
  5,100
  5,488
  5,891
  6,309
  6,744
  7,196
  7,667
  8,156
  8,665
  9,195
  9,747
  10,323
  10,923
  11,550
  12,203
  12,886
  13,599
  14,345
  15,124
  15,939
  16,792
  17,685
  18,619
  19,598
  20,623
  21,697
Adjusted assets (=assets-cash), $m
  3,693
  4,024
  4,369
  4,728
  5,100
  5,488
  5,891
  6,309
  6,744
  7,196
  7,667
  8,156
  8,665
  9,195
  9,747
  10,323
  10,923
  11,550
  12,203
  12,886
  13,599
  14,345
  15,124
  15,939
  16,792
  17,685
  18,619
  19,598
  20,623
  21,697
Revenue / Adjusted assets
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
Average production assets, $m
  1,428
  1,556
  1,689
  1,828
  1,972
  2,121
  2,277
  2,439
  2,607
  2,782
  2,964
  3,153
  3,350
  3,555
  3,768
  3,991
  4,223
  4,465
  4,717
  4,981
  5,257
  5,545
  5,847
  6,162
  6,491
  6,836
  7,198
  7,576
  7,972
  8,387
Working capital, $m
  596
  649
  705
  763
  823
  885
  950
  1,018
  1,088
  1,161
  1,237
  1,316
  1,398
  1,484
  1,573
  1,666
  1,762
  1,863
  1,969
  2,079
  2,194
  2,314
  2,440
  2,572
  2,709
  2,853
  3,004
  3,162
  3,327
  3,501
Total debt, $m
  347
  539
  738
  946
  1,162
  1,386
  1,620
  1,862
  2,114
  2,375
  2,648
  2,931
  3,226
  3,533
  3,853
  4,186
  4,533
  4,896
  5,275
  5,670
  6,083
  6,514
  6,966
  7,438
  7,932
  8,448
  8,989
  9,556
  10,150
  10,771
Total liabilities, $m
  2,138
  2,330
  2,530
  2,737
  2,953
  3,178
  3,411
  3,653
  3,905
  4,167
  4,439
  4,722
  5,017
  5,324
  5,644
  5,977
  6,325
  6,687
  7,066
  7,461
  7,874
  8,306
  8,757
  9,229
  9,723
  10,240
  10,781
  11,347
  11,941
  12,563
Total equity, $m
  1,555
  1,694
  1,839
  1,990
  2,147
  2,310
  2,480
  2,656
  2,839
  3,030
  3,228
  3,434
  3,648
  3,871
  4,104
  4,346
  4,599
  4,862
  5,138
  5,425
  5,725
  6,039
  6,367
  6,710
  7,070
  7,445
  7,839
  8,251
  8,682
  9,134
Total liabilities and equity, $m
  3,693
  4,024
  4,369
  4,727
  5,100
  5,488
  5,891
  6,309
  6,744
  7,197
  7,667
  8,156
  8,665
  9,195
  9,748
  10,323
  10,924
  11,549
  12,204
  12,886
  13,599
  14,345
  15,124
  15,939
  16,793
  17,685
  18,620
  19,598
  20,623
  21,697
Debt-to-equity ratio
  0.220
  0.320
  0.400
  0.480
  0.540
  0.600
  0.650
  0.700
  0.740
  0.780
  0.820
  0.850
  0.880
  0.910
  0.940
  0.960
  0.990
  1.010
  1.030
  1.050
  1.060
  1.080
  1.090
  1.110
  1.120
  1.130
  1.150
  1.160
  1.170
  1.180
Adjusted equity ratio
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  262
  257
  251
  245
  239
  233
  227
  220
  213
  205
  268
  260
  252
  244
  235
  226
  216
  206
  196
  185
  174
  162
  150
  138
  124
  111
  96
  81
  65
  49
Depreciation, amort., depletion, $m
  242
  255
  269
  283
  298
  313
  329
  346
  363
  381
  302
  322
  342
  363
  384
  407
  431
  456
  481
  508
  536
  566
  597
  629
  662
  698
  734
  773
  813
  856
Funds from operations, $m
  504
  512
  520
  529
  537
  546
  556
  565
  575
  586
  571
  582
  594
  606
  619
  633
  647
  662
  677
  693
  710
  728
  747
  766
  787
  808
  831
  854
  879
  905
Change in working capital, $m
  51
  53
  56
  58
  60
  63
  65
  68
  70
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  110
  115
  120
  126
  132
  138
  144
  151
  158
  165
  173
Cash from operations, $m
  453
  459
  465
  471
  477
  484
  491
  498
  505
  513
  495
  503
  512
  521
  530
  540
  550
  561
  572
  583
  595
  608
  621
  635
  649
  664
  680
  696
  713
  731
Maintenance CAPEX, $m
  -133
  -146
  -159
  -172
  -186
  -201
  -216
  -232
  -249
  -266
  -284
  -302
  -322
  -342
  -363
  -384
  -407
  -431
  -456
  -481
  -508
  -536
  -566
  -597
  -629
  -662
  -698
  -734
  -773
  -813
New CAPEX, $m
  -121
  -128
  -133
  -139
  -144
  -150
  -156
  -162
  -168
  -175
  -182
  -189
  -197
  -205
  -214
  -223
  -232
  -242
  -253
  -264
  -276
  -288
  -301
  -315
  -330
  -345
  -361
  -378
  -396
  -415
Cash from investing activities, $m
  -254
  -274
  -292
  -311
  -330
  -351
  -372
  -394
  -417
  -441
  -466
  -491
  -519
  -547
  -577
  -607
  -639
  -673
  -709
  -745
  -784
  -824
  -867
  -912
  -959
  -1,007
  -1,059
  -1,112
  -1,169
  -1,228
Free cash flow, $m
  198
  185
  173
  160
  147
  133
  118
  104
  88
  72
  29
  12
  -7
  -26
  -46
  -67
  -89
  -112
  -137
  -162
  -189
  -217
  -246
  -277
  -309
  -343
  -379
  -417
  -456
  -497
Issuance/(repayment) of debt, $m
  183
  192
  200
  208
  216
  224
  233
  242
  252
  262
  272
  283
  295
  307
  320
  333
  348
  363
  379
  395
  413
  432
  451
  472
  494
  517
  541
  567
  593
  622
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  17
  37
  57
  79
  102
  126
  151
  178
  206
  235
  265
  297
  331
  366
  403
Cash from financing (excl. dividends), $m  
  183
  192
  200
  208
  216
  224
  233
  242
  252
  262
  272
  283
  295
  307
  320
  350
  385
  420
  458
  497
  539
  583
  629
  678
  729
  782
  838
  898
  959
  1,025
Total cash flow (excl. dividends), $m
  382
  377
  372
  367
  362
  357
  352
  346
  340
  334
  301
  295
  288
  281
  274
  283
  295
  308
  321
  336
  351
  366
  383
  401
  419
  439
  459
  481
  504
  528
Retained Cash Flow (-), $m
  -132
  -139
  -145
  -151
  -157
  -163
  -170
  -176
  -183
  -190
  -198
  -206
  -214
  -223
  -233
  -242
  -253
  -264
  -275
  -287
  -300
  -314
  -328
  -343
  -359
  -376
  -393
  -412
  -432
  -452
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
  249
  237
  227
  216
  205
  194
  182
  170
  157
  144
  103
  89
  74
  58
  41
  41
  42
  44
  46
  48
  50
  53
  55
  57
  60
  63
  66
  69
  72
  76
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
  239
  217
  198
  178
  159
  141
  123
  106
  90
  75
  49
  38
  28
  19
  12
  10
  9
  8
  7
  6
  5
  4
  4
  3
  2
  2
  1
  1
  1
  1
Current shareholders' claim on cash, %
  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
  99.9
  99.8
  99.5
  99.2
  98.9
  98.4
  98.0
  97.4
  96.8
  96.2
  95.5
  94.8
  94.1
  93.3
  92.5

AptarGroup, Inc. is a provider of a range of packaging, dispensing and sealing solutions, primarily for the beauty, personal care, homecare, prescription drug, consumer healthcare, injectables, food and beverage markets. The Company has manufacturing facilities located throughout the world, including North America, Europe, Asia and South America. The Company operates through three segments: Beauty + Home, Pharma and Food + Beverage. It offers various dispensing and sealing solutions. Its primary products are dispensing pumps, closures, aerosol valves and elastomeric primary packaging components. Its elastomeric components also include pre filled syringe components, such as plungers, needle shields, tip caps and cartridges, as well as dropper bulbs and syringe plungers. Its Beauty + Home segment primarily sells pumps, closures, aerosol valves, accessories and sealing solutions to the personal care and home care markets, and pumps and decorative components to the beauty market.

FINANCIAL RATIOS  of  AptarGroup, Inc. (ATR)

Valuation Ratios
P/E Ratio 36.4
Price to Sales 3.2
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow 23
Price to Free Cash Flow 38.3
Growth Rates
Sales Growth Rate 0.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.1%
Cap. Spend. - 3 Yr. Gr. Rate -2.9%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 65.8%
Total Debt to Equity 80.7%
Interest Coverage 9
Management Effectiveness
Return On Assets 9.2%
Ret/ On Assets - 3 Yr. Avg. 8.9%
Return On Total Capital 10.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10%
Return On Equity 17.7%
Return On Equity - 3 Yr. Avg. 16.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 35.7%
Gross Margin - 3 Yr. Avg. 34.5%
EBITDA Margin 20.2%
EBITDA Margin - 3 Yr. Avg. 19.3%
Operating Margin 13.3%
Oper. Margin - 3 Yr. Avg. 13%
Pre-Tax Margin 12.1%
Pre-Tax Margin - 3 Yr. Avg. 11.9%
Net Profit Margin 8.8%
Net Profit Margin - 3 Yr. Avg. 8.3%
Effective Tax Rate 26.7%
Eff/ Tax Rate - 3 Yr. Avg. 30.7%
Payout Ratio 37.4%

ATR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATR stock intrinsic value calculation we used $2765 million for the last fiscal year's total revenue generated by AptarGroup, Inc.. The default revenue input number comes from 0001 income statement of AptarGroup, 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 ATR stock valuation model: a) initial revenue growth rate of 9.4% 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 ATR is calculated based on our internal credit rating of AptarGroup, 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 AptarGroup, 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 ATR stock the variable cost ratio is equal to 86.9%.

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 ATR 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 28.4% for AptarGroup, Inc..

Corporate tax rate of 27% is the nominal tax rate for AptarGroup, 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 ATR 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 ATR are equal to 47.2%.

Life of production assets of 9.8 years is the average useful life of capital assets used in AptarGroup, 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 ATR is equal to 19.7%. 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 - $1422.556 million for AptarGroup, 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 62.979 million for AptarGroup, 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 AptarGroup, Inc. at the current share price and the inputted number of shares is $7.6 billion.

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