Intrinsic value of Bemis Company, Inc. - BMS

Previous Close

$58.08

  Intrinsic Value

$9.93

stock screener

  Rating & Target

str. sell

-83%

Previous close

$58.08

 
Intrinsic value

$9.93

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of BMS 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 5.3

 

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
  4,172
  4,268
  4,377
  4,501
  4,637
  4,787
  4,950
  5,126
  5,316
  5,520
  5,739
  5,972
  6,219
  6,483
  6,763
  7,059
  7,373
  7,705
  8,055
  8,425
  8,816
  9,228
  9,662
  10,119
  10,601
  11,108
  11,642
  12,204
  12,795
  13,416
Variable operating expenses, $m
  4,045
  4,136
  4,239
  4,356
  4,485
  4,627
  4,781
  4,948
  5,128
  5,321
  5,431
  5,651
  5,886
  6,135
  6,400
  6,680
  6,977
  7,291
  7,623
  7,973
  8,343
  8,733
  9,143
  9,576
  10,032
  10,512
  11,017
  11,549
  12,108
  12,697
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
  4,045
  4,136
  4,239
  4,356
  4,485
  4,627
  4,781
  4,948
  5,128
  5,321
  5,431
  5,651
  5,886
  6,135
  6,400
  6,680
  6,977
  7,291
  7,623
  7,973
  8,343
  8,733
  9,143
  9,576
  10,032
  10,512
  11,017
  11,549
  12,108
  12,697
Operating income, $m
  127
  132
  138
  145
  152
  160
  169
  178
  188
  199
  308
  320
  334
  348
  363
  379
  395
  413
  432
  452
  473
  495
  518
  543
  569
  596
  625
  655
  686
  720
EBITDA, $m
  358
  366
  376
  386
  398
  411
  425
  440
  456
  474
  492
  512
  534
  556
  580
  606
  633
  661
  691
  723
  756
  792
  829
  868
  909
  953
  999
  1,047
  1,098
  1,151
Interest expense (income), $m
  57
  73
  76
  79
  83
  86
  91
  95
  100
  106
  112
  118
  125
  132
  140
  148
  157
  166
  176
  186
  197
  209
  221
  234
  247
  261
  276
  292
  309
  326
  345
Earnings before tax, $m
  54
  56
  59
  62
  66
  69
  74
  78
  83
  88
  190
  195
  201
  208
  215
  222
  229
  238
  246
  255
  264
  274
  285
  296
  307
  320
  332
  346
  360
  375
Tax expense, $m
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  51
  53
  54
  56
  58
  60
  62
  64
  66
  69
  71
  74
  77
  80
  83
  86
  90
  93
  97
  101
Net income, $m
  39
  41
  43
  45
  48
  51
  54
  57
  60
  64
  138
  143
  147
  152
  157
  162
  168
  173
  180
  186
  193
  200
  208
  216
  224
  233
  243
  253
  263
  274

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
  3,643
  3,727
  3,823
  3,931
  4,050
  4,181
  4,323
  4,477
  4,643
  4,821
  5,012
  5,215
  5,432
  5,662
  5,906
  6,165
  6,439
  6,729
  7,035
  7,358
  7,699
  8,059
  8,438
  8,838
  9,258
  9,701
  10,168
  10,658
  11,174
  11,717
Adjusted assets (=assets-cash), $m
  3,643
  3,727
  3,823
  3,931
  4,050
  4,181
  4,323
  4,477
  4,643
  4,821
  5,012
  5,215
  5,432
  5,662
  5,906
  6,165
  6,439
  6,729
  7,035
  7,358
  7,699
  8,059
  8,438
  8,838
  9,258
  9,701
  10,168
  10,658
  11,174
  11,717
Revenue / Adjusted assets
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
  1.145
Average production assets, $m
  1,811
  1,852
  1,900
  1,953
  2,012
  2,077
  2,148
  2,225
  2,307
  2,396
  2,491
  2,592
  2,699
  2,814
  2,935
  3,064
  3,200
  3,344
  3,496
  3,657
  3,826
  4,005
  4,193
  4,392
  4,601
  4,821
  5,053
  5,296
  5,553
  5,823
Working capital, $m
  480
  491
  503
  518
  533
  550
  569
  590
  611
  635
  660
  687
  715
  746
  778
  812
  848
  886
  926
  969
  1,014
  1,061
  1,111
  1,164
  1,219
  1,277
  1,339
  1,403
  1,471
  1,543
Total debt, $m
  1,410
  1,466
  1,529
  1,600
  1,678
  1,765
  1,859
  1,960
  2,070
  2,188
  2,313
  2,448
  2,591
  2,742
  2,904
  3,074
  3,255
  3,447
  3,649
  3,862
  4,087
  4,324
  4,575
  4,838
  5,116
  5,408
  5,716
  6,040
  6,381
  6,739
Total liabilities, $m
  2,405
  2,460
  2,523
  2,594
  2,673
  2,759
  2,853
  2,955
  3,064
  3,182
  3,308
  3,442
  3,585
  3,737
  3,898
  4,069
  4,250
  4,441
  4,643
  4,856
  5,082
  5,319
  5,569
  5,833
  6,111
  6,403
  6,711
  7,034
  7,375
  7,733
Total equity, $m
  1,239
  1,267
  1,300
  1,336
  1,377
  1,421
  1,470
  1,522
  1,579
  1,639
  1,704
  1,773
  1,847
  1,925
  2,008
  2,096
  2,189
  2,288
  2,392
  2,502
  2,618
  2,740
  2,869
  3,005
  3,148
  3,298
  3,457
  3,624
  3,799
  3,984
Total liabilities and equity, $m
  3,644
  3,727
  3,823
  3,930
  4,050
  4,180
  4,323
  4,477
  4,643
  4,821
  5,012
  5,215
  5,432
  5,662
  5,906
  6,165
  6,439
  6,729
  7,035
  7,358
  7,700
  8,059
  8,438
  8,838
  9,259
  9,701
  10,168
  10,658
  11,174
  11,717
Debt-to-equity ratio
  1.140
  1.160
  1.180
  1.200
  1.220
  1.240
  1.260
  1.290
  1.310
  1.330
  1.360
  1.380
  1.400
  1.420
  1.450
  1.470
  1.490
  1.510
  1.530
  1.540
  1.560
  1.580
  1.590
  1.610
  1.630
  1.640
  1.650
  1.670
  1.680
  1.690
Adjusted equity ratio
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  39
  41
  43
  45
  48
  51
  54
  57
  60
  64
  138
  143
  147
  152
  157
  162
  168
  173
  180
  186
  193
  200
  208
  216
  224
  233
  243
  253
  263
  274
Depreciation, amort., depletion, $m
  231
  234
  237
  241
  246
  251
  256
  261
  268
  274
  184
  192
  200
  208
  217
  227
  237
  248
  259
  271
  283
  297
  311
  325
  341
  357
  374
  392
  411
  431
Funds from operations, $m
  270
  275
  280
  287
  294
  301
  310
  318
  328
  338
  323
  335
  347
  360
  374
  389
  405
  421
  439
  457
  476
  497
  518
  541
  565
  590
  617
  645
  674
  705
Change in working capital, $m
  9
  11
  13
  14
  16
  17
  19
  20
  22
  23
  25
  27
  29
  30
  32
  34
  36
  38
  40
  43
  45
  47
  50
  53
  55
  58
  61
  65
  68
  71
Cash from operations, $m
  261
  264
  268
  273
  278
  284
  291
  298
  306
  315
  298
  308
  318
  330
  342
  355
  368
  383
  398
  414
  431
  450
  469
  489
  510
  532
  556
  580
  606
  634
Maintenance CAPEX, $m
  -131
  -134
  -137
  -141
  -145
  -149
  -154
  -159
  -165
  -171
  -177
  -184
  -192
  -200
  -208
  -217
  -227
  -237
  -248
  -259
  -271
  -283
  -297
  -311
  -325
  -341
  -357
  -374
  -392
  -411
New CAPEX, $m
  -36
  -42
  -48
  -53
  -59
  -65
  -71
  -77
  -83
  -89
  -95
  -101
  -108
  -114
  -121
  -129
  -136
  -144
  -152
  -161
  -169
  -179
  -188
  -199
  -209
  -220
  -232
  -244
  -257
  -270
Cash from investing activities, $m
  -167
  -176
  -185
  -194
  -204
  -214
  -225
  -236
  -248
  -260
  -272
  -285
  -300
  -314
  -329
  -346
  -363
  -381
  -400
  -420
  -440
  -462
  -485
  -510
  -534
  -561
  -589
  -618
  -649
  -681
Free cash flow, $m
  93
  88
  83
  78
  74
  70
  66
  62
  59
  55
  26
  22
  19
  16
  12
  9
  5
  2
  -2
  -5
  -9
  -13
  -16
  -20
  -25
  -29
  -33
  -38
  -43
  -47
Issuance/(repayment) of debt, $m
  50
  55
  63
  71
  79
  86
  94
  102
  110
  118
  126
  134
  143
  152
  161
  171
  181
  191
  202
  213
  225
  237
  250
  264
  278
  292
  308
  324
  341
  358
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  50
  55
  63
  71
  79
  86
  94
  102
  110
  118
  126
  134
  143
  152
  161
  171
  181
  191
  202
  213
  225
  237
  250
  264
  278
  292
  308
  324
  341
  358
Total cash flow (excl. dividends), $m
  143
  143
  146
  149
  153
  156
  160
  164
  168
  173
  151
  157
  162
  167
  173
  180
  186
  193
  200
  208
  216
  225
  234
  243
  253
  264
  274
  286
  298
  311
Retained Cash Flow (-), $m
  -23
  -28
  -33
  -37
  -41
  -44
  -48
  -52
  -56
  -61
  -65
  -69
  -74
  -78
  -83
  -88
  -93
  -99
  -104
  -110
  -116
  -122
  -129
  -136
  -143
  -151
  -159
  -167
  -176
  -185
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
  120
  115
  114
  113
  112
  112
  112
  112
  112
  112
  87
  87
  88
  89
  90
  92
  93
  95
  96
  98
  100
  102
  105
  107
  110
  113
  116
  119
  123
  126
Discount rate, %
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
  113
  101
  92
  84
  77
  69
  62
  55
  49
  43
  29
  25
  21
  18
  15
  12
  10
  8
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
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
  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

Bemis Company, Inc. is a manufacturer of packaging products. The Company operates through two segments: U.S. Packaging and Global Packaging. The U.S. Packaging segment represents all food, consumer, and industrial products packaging-related manufacturing operations located in the United States. The Global Packaging segment includes all packaging-related manufacturing operations located outside of the United States, as well as global medical device and pharmaceutical packaging-related manufacturing operations. This segment manufactures multilayer polymer, blown and cast film structures to produce packaging sold for a range of food, medical, pharmaceutical, personal care, electronics, and industrial applications. Its products are sold to customers in the food industry. The Company's other customers include companies in various types of businesses, including chemical, agribusiness, medical, pharmaceutical, personal care, electronics, construction, and other consumer goods.

FINANCIAL RATIOS  of  Bemis Company, Inc. (BMS)

Valuation Ratios
P/E Ratio 22.8
Price to Sales 1.3
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 12.3
Price to Free Cash Flow 23.5
Growth Rates
Sales Growth Rate -1.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -5%
Cap. Spend. - 3 Yr. Gr. Rate 8.2%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 121.3%
Total Debt to Equity 122.6%
Interest Coverage 7
Management Effectiveness
Return On Assets 7.6%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 8.7%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 19.1%
Return On Equity - 3 Yr. Avg. 16.5%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 21.6%
Gross Margin - 3 Yr. Avg. 20.9%
EBITDA Margin 14.2%
EBITDA Margin - 3 Yr. Avg. 14.1%
Operating Margin 10.2%
Oper. Margin - 3 Yr. Avg. 9.9%
Pre-Tax Margin 8.8%
Pre-Tax Margin - 3 Yr. Avg. 8.7%
Net Profit Margin 5.9%
Net Profit Margin - 3 Yr. Avg. 5.4%
Effective Tax Rate 32.8%
Eff/ Tax Rate - 3 Yr. Avg. 33.5%
Payout Ratio 48.3%

BMS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BMS stock intrinsic value calculation we used $4090 million for the last fiscal year's total revenue generated by Bemis Company, Inc.. The default revenue input number comes from 0001 income statement of Bemis Company, 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 BMS 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 6.5%, whose default value for BMS is calculated based on our internal credit rating of Bemis Company, 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 Bemis Company, 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 BMS stock the variable cost ratio is equal to 97%.

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 BMS 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 Bemis Company, Inc..

Corporate tax rate of 27% is the nominal tax rate for Bemis Company, 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 BMS 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 BMS are equal to 43.4%.

Life of production assets of 13.5 years is the average useful life of capital assets used in Bemis Company, 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 BMS is equal to 11.5%. 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 - $1215.9 million for Bemis Company, 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 91.149 million for Bemis Company, 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 Bemis Company, Inc. at the current share price and the inputted number of shares is $5.3 billion.

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