Intrinsic value of Chemours Company (The) - CC

Previous Close

$38.09

  Intrinsic Value

$51.30

stock screener

  Rating & Target

buy

+35%

Previous close

$38.09

 
Intrinsic value

$51.30

 
Up/down potential

+35%

 
Rating

buy

We calculate the intrinsic value of CC 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 6.4

 

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
  6,771
  6,926
  7,104
  7,304
  7,526
  7,769
  8,033
  8,320
  8,628
  8,959
  9,314
  9,692
  10,094
  10,522
  10,976
  11,457
  11,966
  12,504
  13,073
  13,674
  14,308
  14,976
  15,681
  16,423
  17,205
  18,028
  18,895
  19,806
  20,766
  21,775
Variable operating expenses, $m
  3,764
  3,850
  3,949
  4,059
  4,182
  4,316
  4,463
  4,621
  4,792
  4,975
  5,153
  5,362
  5,585
  5,821
  6,073
  6,339
  6,620
  6,918
  7,233
  7,565
  7,916
  8,286
  8,676
  9,086
  9,519
  9,974
  10,454
  10,958
  11,489
  12,047
Fixed operating expenses, $m
  1,843
  1,883
  1,925
  1,967
  2,010
  2,054
  2,100
  2,146
  2,193
  2,241
  2,291
  2,341
  2,393
  2,445
  2,499
  2,554
  2,610
  2,668
  2,726
  2,786
  2,848
  2,910
  2,974
  3,040
  3,106
  3,175
  3,245
  3,316
  3,389
  3,464
Total operating expenses, $m
  5,607
  5,733
  5,874
  6,026
  6,192
  6,370
  6,563
  6,767
  6,985
  7,216
  7,444
  7,703
  7,978
  8,266
  8,572
  8,893
  9,230
  9,586
  9,959
  10,351
  10,764
  11,196
  11,650
  12,126
  12,625
  13,149
  13,699
  14,274
  14,878
  15,511
Operating income, $m
  1,164
  1,193
  1,231
  1,278
  1,334
  1,398
  1,471
  1,553
  1,643
  1,743
  1,870
  1,989
  2,117
  2,255
  2,404
  2,564
  2,735
  2,918
  3,114
  3,322
  3,544
  3,780
  4,031
  4,297
  4,579
  4,879
  5,196
  5,532
  5,888
  6,264
EBITDA, $m
  1,464
  1,500
  1,545
  1,601
  1,666
  1,740
  1,824
  1,918
  2,021
  2,135
  2,259
  2,393
  2,538
  2,694
  2,862
  3,042
  3,234
  3,440
  3,659
  3,893
  4,141
  4,405
  4,685
  4,982
  5,297
  5,631
  5,984
  6,358
  6,754
  7,172
Interest expense (income), $m
  208
  214
  221
  229
  238
  249
  260
  273
  286
  301
  317
  334
  352
  372
  393
  415
  438
  463
  489
  517
  546
  577
  610
  645
  681
  719
  760
  802
  847
  894
  943
Earnings before tax, $m
  949
  972
  1,002
  1,040
  1,085
  1,138
  1,198
  1,266
  1,342
  1,426
  1,536
  1,636
  1,745
  1,863
  1,990
  2,126
  2,272
  2,429
  2,597
  2,776
  2,967
  3,170
  3,386
  3,616
  3,860
  4,119
  4,394
  4,685
  4,994
  5,320
Tax expense, $m
  256
  262
  271
  281
  293
  307
  324
  342
  362
  385
  415
  442
  471
  503
  537
  574
  614
  656
  701
  750
  801
  856
  914
  976
  1,042
  1,112
  1,186
  1,265
  1,348
  1,437
Net income, $m
  693
  709
  731
  759
  792
  831
  875
  924
  980
  1,041
  1,121
  1,194
  1,274
  1,360
  1,452
  1,552
  1,659
  1,773
  1,896
  2,026
  2,166
  2,314
  2,472
  2,640
  2,818
  3,007
  3,208
  3,420
  3,645
  3,884

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
  7,506
  7,679
  7,876
  8,098
  8,343
  8,613
  8,906
  9,224
  9,566
  9,933
  10,326
  10,745
  11,191
  11,665
  12,168
  12,701
  13,266
  13,863
  14,494
  15,160
  15,862
  16,603
  17,384
  18,207
  19,074
  19,987
  20,947
  21,958
  23,022
  24,140
Adjusted assets (=assets-cash), $m
  7,506
  7,679
  7,876
  8,098
  8,343
  8,613
  8,906
  9,224
  9,566
  9,933
  10,326
  10,745
  11,191
  11,665
  12,168
  12,701
  13,266
  13,863
  14,494
  15,160
  15,862
  16,603
  17,384
  18,207
  19,074
  19,987
  20,947
  21,958
  23,022
  24,140
Revenue / Adjusted assets
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
Average production assets, $m
  3,304
  3,380
  3,467
  3,565
  3,673
  3,791
  3,920
  4,060
  4,211
  4,372
  4,545
  4,730
  4,926
  5,135
  5,356
  5,591
  5,839
  6,102
  6,380
  6,673
  6,982
  7,308
  7,652
  8,014
  8,396
  8,798
  9,221
  9,665
  10,134
  10,626
Working capital, $m
  406
  416
  426
  438
  452
  466
  482
  499
  518
  538
  559
  582
  606
  631
  659
  687
  718
  750
  784
  820
  858
  899
  941
  985
  1,032
  1,082
  1,134
  1,188
  1,246
  1,306
Total debt, $m
  4,095
  4,243
  4,413
  4,604
  4,816
  5,048
  5,301
  5,575
  5,870
  6,186
  6,525
  6,886
  7,271
  7,679
  8,113
  8,573
  9,059
  9,574
  10,117
  10,692
  11,297
  11,936
  12,609
  13,319
  14,066
  14,853
  15,681
  16,552
  17,469
  18,433
Total liabilities, $m
  6,471
  6,619
  6,789
  6,980
  7,192
  7,424
  7,677
  7,951
  8,246
  8,562
  8,901
  9,262
  9,647
  10,055
  10,489
  10,949
  11,435
  11,950
  12,493
  13,068
  13,673
  14,312
  14,985
  15,695
  16,442
  17,229
  18,057
  18,928
  19,845
  20,809
Total equity, $m
  1,036
  1,060
  1,087
  1,118
  1,151
  1,189
  1,229
  1,273
  1,320
  1,371
  1,425
  1,483
  1,544
  1,610
  1,679
  1,753
  1,831
  1,913
  2,000
  2,092
  2,189
  2,291
  2,399
  2,513
  2,632
  2,758
  2,891
  3,030
  3,177
  3,331
Total liabilities and equity, $m
  7,507
  7,679
  7,876
  8,098
  8,343
  8,613
  8,906
  9,224
  9,566
  9,933
  10,326
  10,745
  11,191
  11,665
  12,168
  12,702
  13,266
  13,863
  14,493
  15,160
  15,862
  16,603
  17,384
  18,208
  19,074
  19,987
  20,948
  21,958
  23,022
  24,140
Debt-to-equity ratio
  3.950
  4.000
  4.060
  4.120
  4.180
  4.250
  4.310
  4.380
  4.450
  4.510
  4.580
  4.640
  4.710
  4.770
  4.830
  4.890
  4.950
  5.000
  5.060
  5.110
  5.160
  5.210
  5.260
  5.300
  5.340
  5.380
  5.420
  5.460
  5.500
  5.530
Adjusted equity ratio
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  693
  709
  731
  759
  792
  831
  875
  924
  980
  1,041
  1,121
  1,194
  1,274
  1,360
  1,452
  1,552
  1,659
  1,773
  1,896
  2,026
  2,166
  2,314
  2,472
  2,640
  2,818
  3,007
  3,208
  3,420
  3,645
  3,884
Depreciation, amort., depletion, $m
  301
  307
  314
  323
  332
  342
  353
  365
  378
  392
  388
  404
  421
  439
  458
  478
  499
  522
  545
  570
  597
  625
  654
  685
  718
  752
  788
  826
  866
  908
Funds from operations, $m
  994
  1,016
  1,046
  1,082
  1,124
  1,173
  1,228
  1,290
  1,358
  1,433
  1,510
  1,599
  1,695
  1,799
  1,910
  2,030
  2,158
  2,295
  2,441
  2,597
  2,763
  2,939
  3,126
  3,325
  3,536
  3,759
  3,996
  4,246
  4,512
  4,792
Change in working capital, $m
  8
  9
  11
  12
  13
  15
  16
  17
  19
  20
  21
  23
  24
  26
  27
  29
  31
  32
  34
  36
  38
  40
  42
  45
  47
  49
  52
  55
  58
  61
Cash from operations, $m
  986
  1,007
  1,035
  1,070
  1,111
  1,158
  1,212
  1,272
  1,339
  1,413
  1,488
  1,576
  1,671
  1,773
  1,883
  2,001
  2,127
  2,263
  2,407
  2,561
  2,725
  2,899
  3,084
  3,280
  3,489
  3,710
  3,944
  4,192
  4,454
  4,732
Maintenance CAPEX, $m
  -277
  -282
  -289
  -296
  -305
  -314
  -324
  -335
  -347
  -360
  -374
  -388
  -404
  -421
  -439
  -458
  -478
  -499
  -522
  -545
  -570
  -597
  -625
  -654
  -685
  -718
  -752
  -788
  -826
  -866
New CAPEX, $m
  -68
  -76
  -87
  -98
  -108
  -119
  -129
  -140
  -151
  -162
  -173
  -184
  -196
  -209
  -221
  -235
  -248
  -263
  -278
  -293
  -309
  -326
  -344
  -362
  -382
  -402
  -423
  -445
  -468
  -492
Cash from investing activities, $m
  -345
  -358
  -376
  -394
  -413
  -433
  -453
  -475
  -498
  -522
  -547
  -572
  -600
  -630
  -660
  -693
  -726
  -762
  -800
  -838
  -879
  -923
  -969
  -1,016
  -1,067
  -1,120
  -1,175
  -1,233
  -1,294
  -1,358
Free cash flow, $m
  641
  649
  659
  676
  698
  726
  759
  798
  842
  891
  942
  1,003
  1,070
  1,143
  1,223
  1,308
  1,401
  1,501
  1,608
  1,722
  1,845
  1,976
  2,115
  2,264
  2,422
  2,590
  2,769
  2,959
  3,160
  3,373
Issuance/(repayment) of debt, $m
  123
  149
  170
  191
  212
  232
  253
  274
  295
  316
  339
  361
  385
  409
  434
  460
  487
  515
  544
  574
  606
  639
  673
  709
  747
  787
  828
  871
  917
  964
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  
  123
  149
  170
  191
  212
  232
  253
  274
  295
  316
  339
  361
  385
  409
  434
  460
  487
  515
  544
  574
  606
  639
  673
  709
  747
  787
  828
  871
  917
  964
Total cash flow (excl. dividends), $m
  764
  798
  829
  867
  910
  958
  1,012
  1,071
  1,137
  1,208
  1,280
  1,364
  1,455
  1,552
  1,656
  1,768
  1,888
  2,015
  2,151
  2,296
  2,451
  2,615
  2,789
  2,973
  3,169
  3,377
  3,597
  3,830
  4,076
  4,337
Retained Cash Flow (-), $m
  -22
  -24
  -27
  -31
  -34
  -37
  -40
  -44
  -47
  -51
  -54
  -58
  -62
  -65
  -69
  -74
  -78
  -82
  -87
  -92
  -97
  -102
  -108
  -114
  -120
  -126
  -133
  -139
  -147
  -154
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
  742
  774
  802
  836
  876
  921
  971
  1,027
  1,089
  1,157
  1,226
  1,306
  1,393
  1,486
  1,587
  1,695
  1,810
  1,933
  2,064
  2,204
  2,354
  2,512
  2,681
  2,860
  3,050
  3,251
  3,464
  3,690
  3,930
  4,183
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
  696
  678
  652
  626
  599
  571
  541
  510
  477
  443
  405
  369
  332
  295
  258
  223
  190
  159
  130
  105
  83
  65
  49
  36
  26
  18
  13
  8
  5
  3
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

The Chemours Company is a provider of performance chemicals. The Company operates through three segments: Titanium Technologies, Fluoroproducts and Chemical Solutions. The Titanium Technologies segment is a producer of titanium dioxide (TiO2). The Fluoroproducts segment is a provider of fluoroproducts, including refrigerants and industrial fluoropolymer resins. The Chemical Solutions segment is a North American provider of industrial chemicals used in gold production, oil and gas, water treatment and other industries. It delivers customized solutions with a range of industrial and specialty chemical products for markets, including plastics and coatings, refrigeration and air conditioning, industrial, mining and oil refining. Its products include titanium dioxide, refrigerants, industrial fluoropolymer resins and a portfolio of mining and industrial chemicals, including sodium cyanide. As of December 31, 2016, the Company operates 26 production facilities located in 10 countries.

FINANCIAL RATIOS  of  Chemours Company (The) (CC)

Valuation Ratios
P/E Ratio 993.6
Price to Sales 1.3
Price to Book 69.6
Price to Tangible Book
Price to Cash Flow 11.7
Price to Free Cash Flow 27.2
Growth Rates
Sales Growth Rate -5.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -34.9%
Cap. Spend. - 3 Yr. Gr. Rate -5.1%
Financial Strength
Quick Ratio 60
Current Ratio 0
LT Debt to Equity 3529%
Total Debt to Equity 3544%
Interest Coverage 1
Management Effectiveness
Return On Assets -2%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 0.2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 6.2%
Return On Equity - 3 Yr. Avg. 4.4%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 20.6%
Gross Margin - 3 Yr. Avg. 19.5%
EBITDA Margin 8.9%
EBITDA Margin - 3 Yr. Avg. 8.2%
Operating Margin -1.4%
Oper. Margin - 3 Yr. Avg. 1.4%
Pre-Tax Margin -0.2%
Pre-Tax Margin - 3 Yr. Avg. 1.7%
Net Profit Margin 0.1%
Net Profit Margin - 3 Yr. Avg. 1.6%
Effective Tax Rate 163.6%
Eff/ Tax Rate - 3 Yr. Avg. 81%
Payout Ratio 314.3%

CC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CC stock intrinsic value calculation we used $6638 million for the last fiscal year's total revenue generated by Chemours Company (The). The default revenue input number comes from 0001 income statement of Chemours Company (The). 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 CC 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 CC is calculated based on our internal credit rating of Chemours Company (The), 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 Chemours Company (The).
    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 CC stock the variable cost ratio is equal to 55.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1803 million in the base year in the intrinsic value calculation for CC 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 Chemours Company (The).

Corporate tax rate of 27% is the nominal tax rate for Chemours Company (The). 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 CC 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 CC are equal to 48.8%.

Life of production assets of 11.7 years is the average useful life of capital assets used in Chemours Company (The) 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 CC is equal to 6%. 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 - $1014 million for Chemours Company (The) - 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 167.063 million for Chemours Company (The) 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 Chemours Company (The) at the current share price and the inputted number of shares is $6.4 billion.

RELATED COMPANIES Price Int.Val. Rating
MMM 3M Company 190.72 144.94  sell
HUN Huntsman Corpo 22.76 43.77  str.buy
KRO Kronos Worldwi 13.77 27.66  str.buy
HON Honeywell Inte 170.42 132.66  hold

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.