Intrinsic value of Central Puerto S.A. - CEPU

Previous Close

$7.78

  Intrinsic Value

$71.09

stock screener

  Rating & Target

str. buy

+814%

Previous close

$7.78

 
Intrinsic value

$71.09

 
Up/down potential

+814%

 
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 1.2

 

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
  2,518
  3,117
  3,800
  4,568
  5,423
  6,363
  7,387
  8,495
  9,683
  10,951
  12,296
  13,716
  15,211
  16,779
  18,420
  20,133
  21,919
  23,778
  25,713
  27,724
  29,814
  31,986
  34,243
  36,589
Variable operating expenses, $m
  190
  266
  364
  486
  636
  815
  1,025
  1,269
  1,547
  1,860
  2,207
  2,589
  3,006
  3,456
  3,940
  4,456
  5,003
  5,581
  6,189
  6,827
  7,495
  8,192
  8,919
  9,675
  10,462
  11,281
  12,131
  13,015
  13,933
  14,888
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
  2,207
  2,589
  3,006
  3,456
  3,940
  4,456
  5,003
  5,581
  6,189
  6,827
  7,495
  8,192
  8,919
  9,675
  10,462
  11,281
  12,131
  13,015
  13,933
  14,888
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
  5,661
  6,145
  6,648
  7,172
  7,716
  8,281
  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
  4,018
  4,486
  4,979
  5,496
  6,037
  6,602
  7,191
  7,804
  8,442
  9,105
  9,795
  10,511
  11,255
  12,029
  12,833
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
  1,782
  1,942
  2,107
  2,279
  2,458
  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
  2,021
  2,306
  2,610
  2,934
  3,275
  3,635
  4,012
  4,407
  4,819
  5,249
  5,697
  6,163
  6,647
  7,150
  7,673
  8,216
  8,781
  9,368

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
  3,418
  4,470
  5,731
  7,214
  8,931
  10,888
  13,090
  15,538
  18,232
  21,167
  24,340
  27,745
  31,377
  35,231
  39,302
  43,585
  48,078
  52,779
  57,688
  62,805
  68,133
  73,675
  79,437
  85,426
  91,650
  98,118
  104,840
Adjusted assets (=assets-cash), $m
  1,331
  1,869
  2,557
  3,418
  4,470
  5,731
  7,214
  8,931
  10,888
  13,090
  15,538
  18,232
  21,167
  24,340
  27,745
  31,377
  35,231
  39,302
  43,585
  48,078
  52,779
  57,688
  62,805
  68,133
  73,675
  79,437
  85,426
  91,650
  98,118
  104,840
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
  3,485
  4,189
  4,973
  5,835
  6,774
  7,790
  8,879
  10,042
  11,275
  12,578
  13,949
  15,387
  16,891
  18,462
  20,100
  21,805
  23,578
  25,423
  27,339
  29,331
  31,401
  33,552
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
  3,946
  4,952
  6,099
  7,389
  8,824
  10,402
  12,122
  13,981
  15,977
  18,105
  20,364
  22,749
  25,259
  27,892
  30,647
  33,523
  36,522
  39,644
  42,892
  46,269
  49,778
  53,425
  57,215
  61,154
Total liabilities, $m
  780
  1,095
  1,499
  2,003
  2,619
  3,358
  4,227
  5,233
  6,380
  7,671
  9,106
  10,684
  12,404
  14,263
  16,259
  18,387
  20,645
  23,031
  25,541
  28,174
  30,929
  33,805
  36,804
  39,926
  43,174
  46,550
  50,060
  53,707
  57,497
  61,436
Total equity, $m
  551
  774
  1,059
  1,415
  1,850
  2,372
  2,987
  3,697
  4,508
  5,419
  6,433
  7,548
  8,763
  10,077
  11,486
  12,990
  14,586
  16,271
  18,044
  19,904
  21,851
  23,883
  26,001
  28,207
  30,501
  32,887
  35,367
  37,943
  40,621
  43,404
Total liabilities and equity, $m
  1,331
  1,869
  2,558
  3,418
  4,469
  5,730
  7,214
  8,930
  10,888
  13,090
  15,539
  18,232
  21,167
  24,340
  27,745
  31,377
  35,231
  39,302
  43,585
  48,078
  52,780
  57,688
  62,805
  68,133
  73,675
  79,437
  85,427
  91,650
  98,118
  104,840
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
  2,021
  2,306
  2,610
  2,934
  3,275
  3,635
  4,012
  4,407
  4,819
  5,249
  5,697
  6,163
  6,647
  7,150
  7,673
  8,216
  8,781
  9,368
Depreciation, amort., depletion, $m
  26
  36
  49
  65
  85
  109
  137
  169
  206
  247
  293
  343
  398
  458
  522
  591
  663
  740
  821
  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
  2,764
  3,133
  3,524
  3,938
  4,374
  4,832
  5,312
  5,813
  6,335
  6,879
  7,445
  8,034
  8,646
  9,281
  9,942
  10,628
  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
  185
  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
  5,183
  5,678
  6,195
  6,733
  7,293
  7,875
  8,481
  9,110
  9,764
  10,443
  11,149
Maintenance CAPEX, $m
  -17
  -25
  -35
  -48
  -64
  -84
  -108
  -136
  -168
  -205
  -246
  -293
  -343
  -398
  -458
  -522
  -591
  -663
  -740
  -821
  -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
  -784
  -862
  -939
  -1,015
  -1,090
  -1,162
  -1,233
  -1,303
  -1,371
  -1,438
  -1,504
  -1,571
  -1,638
  -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
  -1,030
  -1,155
  -1,282
  -1,413
  -1,548
  -1,684
  -1,824
  -1,966
  -2,111
  -2,259
  -2,409
  -2,565
  -2,724
  -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
  704
  868
  1,053
  1,260
  1,487
  1,735
  2,004
  2,292
  2,599
  2,925
  3,269
  3,630
  4,009
  4,406
  4,819
  5,250
  5,698
  6,164
  6,648
  7,151
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
  2,999
  3,122
  3,248
  3,377
  3,510
  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
  2,999
  3,122
  3,248
  3,377
  3,510
  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
  2,446
  2,773
  3,119
  3,483
  3,864
  4,262
  4,677
  5,109
  5,558
  6,024
  6,507
  7,008
  7,528
  8,067
  8,626
  9,207
  9,811
  10,438
  11,090
Retained Cash Flow (-), $m
  -169
  -223
  -285
  -356
  -436
  -522
  -614
  -711
  -810
  -912
  -1,014
  -1,115
  -1,215
  -1,314
  -1,410
  -1,504
  -1,595
  -1,685
  -1,773
  -1,860
  -1,946
  -2,032
  -2,118
  -2,206
  -2,295
  -2,386
  -2,479
  -2,577
  -2,678
  -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
  1,125
  1,331
  1,558
  1,806
  2,073
  2,360
  2,667
  2,992
  3,336
  3,698
  4,077
  4,475
  4,889
  5,322
  5,772
  6,241
  6,728
  7,234
  7,760
  8,307
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
  129
  162
  200
  244
  292
  343
  395
  446
  493
  534
  568
  592
  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 S.A. (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 $322 million for the last fiscal year's total revenue generated by Central Puerto S.A.. The default revenue input number comes from 0001 income statement of Central Puerto S.A.. 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 S.A., 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 S.A..
    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 S.A..

Corporate tax rate of 27% is the nominal tax rate for Central Puerto S.A.. 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 S.A. 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 S.A. - 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 151.394 million for Central Puerto S.A. 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 S.A. at the current share price and the inputted number of shares is $1.2 billion.

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