Intrinsic value of Central Puerto ADR - CEPU

Previous Close

$10.48

  Intrinsic Value

$420.57

stock screener

  Rating & Target

str. buy

+999%

Previous close

$10.48

 
Intrinsic value

$420.57

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CEPU 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 0.3

 

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, %
  44.30
  40.37
  36.83
  33.65
  30.78
  28.21
  25.89
  23.80
  21.92
  20.23
  18.70
  17.33
  16.10
  14.99
  13.99
  13.09
  12.28
  11.55
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.13
  7.82
  7.54
  7.29
  7.06
  6.85
Revenue, $m
  465
  652
  892
  1,193
  1,560
  2,000
  2,517
  3,117
  3,800
  4,568
  5,423
  6,362
  7,387
  8,494
  9,682
  10,950
  12,295
  13,715
  15,210
  16,778
  18,419
  20,132
  21,917
  23,777
  25,711
  27,722
  29,812
  31,984
  34,241
  36,587
Variable operating expenses, $m
  190
  266
  364
  486
  636
  815
  1,025
  1,269
  1,547
  1,860
  2,206
  2,589
  3,005
  3,456
  3,939
  4,455
  5,002
  5,580
  6,188
  6,826
  7,494
  8,191
  8,917
  9,673
  10,460
  11,279
  12,129
  13,012
  13,931
  14,885
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
  190
  266
  364
  486
  636
  815
  1,025
  1,269
  1,547
  1,860
  2,206
  2,589
  3,005
  3,456
  3,939
  4,455
  5,002
  5,580
  6,188
  6,826
  7,494
  8,191
  8,917
  9,673
  10,460
  11,279
  12,129
  13,012
  13,931
  14,885
Operating income, $m
  275
  386
  528
  706
  924
  1,185
  1,492
  1,848
  2,253
  2,709
  3,216
  3,774
  4,381
  5,038
  5,743
  6,495
  7,293
  8,135
  9,022
  9,952
  10,925
  11,941
  13,000
  14,103
  15,250
  16,443
  17,683
  18,971
  20,310
  21,701
EBITDA, $m
  301
  422
  577
  772
  1,009
  1,294
  1,629
  2,017
  2,459
  2,956
  3,509
  4,117
  4,780
  5,496
  6,265
  7,086
  7,956
  8,875
  9,842
  10,857
  11,919
  13,027
  14,183
  15,386
  16,637
  17,939
  19,291
  20,696
  22,157
  23,675
Interest expense (income), $m
  0
  40
  77
  126
  189
  267
  362
  477
  612
  767
  945
  1,145
  1,368
  1,612
  1,879
  2,167
  2,476
  2,806
  3,156
  3,526
  3,915
  4,323
  4,750
  5,196
  5,660
  6,144
  6,648
  7,171
  7,715
  8,280
  8,868
Earnings before tax, $m
  234
  309
  402
  518
  657
  823
  1,015
  1,236
  1,485
  1,763
  2,071
  2,406
  2,769
  3,159
  3,576
  4,019
  4,487
  4,979
  5,496
  6,037
  6,602
  7,191
  7,805
  8,443
  9,106
  9,796
  10,512
  11,256
  12,030
  12,834
Tax expense, $m
  63
  83
  109
  140
  178
  222
  274
  334
  401
  476
  559
  650
  748
  853
  966
  1,085
  1,211
  1,344
  1,484
  1,630
  1,783
  1,942
  2,107
  2,280
  2,459
  2,645
  2,838
  3,039
  3,248
  3,465
Net income, $m
  171
  225
  294
  378
  480
  601
  741
  902
  1,084
  1,287
  1,512
  1,757
  2,022
  2,306
  2,611
  2,934
  3,275
  3,635
  4,012
  4,407
  4,820
  5,250
  5,697
  6,163
  6,647
  7,151
  7,674
  8,217
  8,782
  9,369

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
  1,331
  1,869
  2,557
  3,417
  4,469
  5,730
  7,213
  8,930
  10,887
  13,089
  15,537
  18,230
  21,165
  24,338
  27,743
  31,375
  35,229
  39,299
  43,582
  48,075
  52,776
  57,684
  62,801
  68,128
  73,670
  79,432
  85,421
  91,644
  98,111
  104,833
Adjusted assets (=assets-cash), $m
  1,331
  1,869
  2,557
  3,417
  4,469
  5,730
  7,213
  8,930
  10,887
  13,089
  15,537
  18,230
  21,165
  24,338
  27,743
  31,375
  35,229
  39,299
  43,582
  48,075
  52,776
  57,684
  62,801
  68,128
  73,670
  79,432
  85,421
  91,644
  98,111
  104,833
Revenue / Adjusted assets
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
  0.349
Average production assets, $m
  426
  598
  818
  1,094
  1,430
  1,834
  2,309
  2,858
  3,484
  4,189
  4,972
  5,834
  6,774
  7,789
  8,879
  10,041
  11,274
  12,577
  13,948
  15,386
  16,890
  18,461
  20,098
  21,803
  23,577
  25,421
  27,337
  29,329
  31,399
  33,550
Working capital, $m
  38
  53
  73
  98
  128
  164
  206
  256
  312
  375
  445
  522
  606
  697
  794
  898
  1,008
  1,125
  1,247
  1,376
  1,510
  1,651
  1,797
  1,950
  2,108
  2,273
  2,445
  2,623
  2,808
  3,000
Total debt, $m
  498
  813
  1,217
  1,721
  2,337
  3,076
  3,945
  4,951
  6,098
  7,388
  8,823
  10,401
  12,121
  13,980
  15,976
  18,104
  20,362
  22,747
  25,257
  27,890
  30,645
  33,521
  36,519
  39,641
  42,889
  46,265
  49,775
  53,421
  57,211
  61,150
Total liabilities, $m
  780
  1,095
  1,498
  2,003
  2,619
  3,358
  4,227
  5,233
  6,380
  7,670
  9,105
  10,683
  12,403
  14,262
  16,257
  18,386
  20,644
  23,029
  25,539
  28,172
  30,927
  33,803
  36,801
  39,923
  43,171
  46,547
  50,057
  53,703
  57,493
  61,432
Total equity, $m
  551
  774
  1,059
  1,415
  1,850
  2,372
  2,986
  3,697
  4,507
  5,419
  6,432
  7,547
  8,762
  10,076
  11,486
  12,989
  14,585
  16,270
  18,043
  19,903
  21,849
  23,881
  25,999
  28,205
  30,499
  32,885
  35,364
  37,941
  40,618
  43,401
Total liabilities and equity, $m
  1,331
  1,869
  2,557
  3,418
  4,469
  5,730
  7,213
  8,930
  10,887
  13,089
  15,537
  18,230
  21,165
  24,338
  27,743
  31,375
  35,229
  39,299
  43,582
  48,075
  52,776
  57,684
  62,800
  68,128
  73,670
  79,432
  85,421
  91,644
  98,111
  104,833
Debt-to-equity ratio
  0.900
  1.050
  1.150
  1.220
  1.260
  1.300
  1.320
  1.340
  1.350
  1.360
  1.370
  1.380
  1.380
  1.390
  1.390
  1.390
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.410
  1.410
  1.410
  1.410
  1.410
  1.410
  1.410
Adjusted equity ratio
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414
  0.414

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  171
  225
  294
  378
  480
  601
  741
  902
  1,084
  1,287
  1,512
  1,757
  2,022
  2,306
  2,611
  2,934
  3,275
  3,635
  4,012
  4,407
  4,820
  5,250
  5,697
  6,163
  6,647
  7,151
  7,674
  8,217
  8,782
  9,369
Depreciation, amort., depletion, $m
  26
  36
  49
  65
  85
  109
  137
  169
  206
  247
  292
  343
  398
  458
  522
  591
  663
  740
  820
  905
  994
  1,086
  1,182
  1,283
  1,387
  1,495
  1,608
  1,725
  1,847
  1,974
Funds from operations, $m
  197
  261
  343
  443
  565
  710
  878
  1,071
  1,290
  1,535
  1,804
  2,100
  2,420
  2,765
  3,133
  3,524
  3,938
  4,375
  4,833
  5,312
  5,813
  6,336
  6,880
  7,446
  8,034
  8,646
  9,282
  9,942
  10,629
  11,342
Change in working capital, $m
  12
  15
  20
  25
  30
  36
  42
  49
  56
  63
  70
  77
  84
  91
  97
  104
  110
  116
  123
  129
  135
  140
  146
  152
  159
  165
  171
  178
  185
  192
Cash from operations, $m
  186
  246
  323
  419
  535
  674
  836
  1,022
  1,234
  1,472
  1,734
  2,023
  2,336
  2,674
  3,035
  3,420
  3,828
  4,258
  4,710
  5,184
  5,679
  6,195
  6,733
  7,293
  7,876
  8,481
  9,110
  9,764
  10,444
  11,150
Maintenance CAPEX, $m
  -17
  -25
  -35
  -48
  -64
  -84
  -108
  -136
  -168
  -205
  -246
  -292
  -343
  -398
  -458
  -522
  -591
  -663
  -740
  -820
  -905
  -994
  -1,086
  -1,182
  -1,283
  -1,387
  -1,495
  -1,608
  -1,725
  -1,847
New CAPEX, $m
  -131
  -172
  -220
  -275
  -337
  -403
  -475
  -549
  -626
  -705
  -783
  -862
  -939
  -1,015
  -1,090
  -1,162
  -1,233
  -1,303
  -1,371
  -1,438
  -1,504
  -1,571
  -1,637
  -1,705
  -1,774
  -1,844
  -1,917
  -1,992
  -2,070
  -2,151
Cash from investing activities, $m
  -148
  -197
  -255
  -323
  -401
  -487
  -583
  -685
  -794
  -910
  -1,029
  -1,154
  -1,282
  -1,413
  -1,548
  -1,684
  -1,824
  -1,966
  -2,111
  -2,258
  -2,409
  -2,565
  -2,723
  -2,887
  -3,057
  -3,231
  -3,412
  -3,600
  -3,795
  -3,998
Free cash flow, $m
  37
  49
  68
  95
  134
  186
  253
  337
  440
  562
  705
  868
  1,054
  1,260
  1,488
  1,736
  2,004
  2,292
  2,599
  2,925
  3,269
  3,631
  4,010
  4,406
  4,820
  5,250
  5,698
  6,164
  6,649
  7,152
Issuance/(repayment) of debt, $m
  239
  315
  403
  504
  617
  739
  869
  1,006
  1,147
  1,290
  1,435
  1,578
  1,720
  1,859
  1,995
  2,128
  2,258
  2,385
  2,510
  2,633
  2,755
  2,876
  2,998
  3,122
  3,248
  3,377
  3,509
  3,647
  3,790
  3,939
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  
  239
  315
  403
  504
  617
  739
  869
  1,006
  1,147
  1,290
  1,435
  1,578
  1,720
  1,859
  1,995
  2,128
  2,258
  2,385
  2,510
  2,633
  2,755
  2,876
  2,998
  3,122
  3,248
  3,377
  3,509
  3,647
  3,790
  3,939
Total cash flow (excl. dividends), $m
  276
  364
  471
  599
  750
  925
  1,122
  1,343
  1,587
  1,852
  2,139
  2,447
  2,773
  3,119
  3,483
  3,864
  4,262
  4,678
  5,109
  5,558
  6,024
  6,507
  7,008
  7,528
  8,067
  8,627
  9,208
  9,811
  10,438
  11,091
Retained Cash Flow (-), $m
  -169
  -222
  -285
  -356
  -436
  -522
  -614
  -711
  -810
  -912
  -1,014
  -1,115
  -1,215
  -1,313
  -1,410
  -1,504
  -1,595
  -1,685
  -1,773
  -1,860
  -1,946
  -2,032
  -2,118
  -2,206
  -2,294
  -2,385
  -2,479
  -2,576
  -2,677
  -2,783
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
  108
  141
  186
  243
  315
  403
  508
  632
  776
  941
  1,126
  1,332
  1,558
  1,806
  2,073
  2,360
  2,667
  2,992
  3,336
  3,698
  4,078
  4,475
  4,890
  5,322
  5,773
  6,241
  6,728
  7,235
  7,761
  8,308
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
  103
  130
  162
  200
  244
  292
  343
  395
  446
  493
  535
  568
  593
  606
  609
  600
  580
  551
  514
  470
  422
  371
  320
  271
  225
  182
  144
  112
  85
  63
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

FINANCIAL RATIOS  of  Central Puerto ADR (CEPU)

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%

CEPU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CEPU stock intrinsic value calculation we used $321.978162162 million for the last fiscal year's total revenue generated by Central Puerto ADR. The default revenue input number comes from 0001 income statement of Central Puerto ADR. 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 CEPU stock valuation model: a) initial revenue growth rate of 44.3% 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 CEPU is calculated based on our internal credit rating of Central Puerto ADR, 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 Central Puerto ADR.
    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 CEPU stock the variable cost ratio is equal to 41%.

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 CEPU 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 15.5% for Central Puerto ADR.

Corporate tax rate of 27% is the nominal tax rate for Central Puerto ADR. 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 CEPU 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 CEPU are equal to 91.7%.

Life of production assets of 17 years is the average useful life of capital assets used in Central Puerto ADR 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 CEPU is equal to 8.2%. 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 - $382.268378378 million for Central Puerto ADR - 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 25.593 million for Central Puerto ADR 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 Central Puerto ADR at the current share price and the inputted number of shares is $0.3 billion.

COMPANY NEWS

▶ Central Puerto SA to Host Earnings Call   [Aug-14-18 10:00AM  ACCESSWIRE]
▶ Central Puerto Files the 2017 Annual Report on Form 20-F   [Apr-28-18 12:44PM  Business Wire]

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