Intrinsic value of Cullen/Frost Bankers - CFR

Previous Close

$115.60

  Intrinsic Value

$8.25

stock screener

  Rating & Target

str. sell

-93%

Previous close

$115.60

 
Intrinsic value

$8.25

 
Up/down potential

-93%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as CFR.

We calculate the intrinsic value of CFR 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 2017), $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 7.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.70
  8.33
  8.00
  7.70
  7.43
  7.18
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
Revenue, $m
  1,269
  1,374
  1,484
  1,598
  1,717
  1,840
  1,969
  2,102
  2,240
  2,385
  2,535
  2,691
  2,853
  3,023
  3,200
  3,384
  3,576
  3,777
  3,987
  4,206
  4,436
  4,675
  4,926
  5,189
  5,463
  5,751
  6,052
  6,368
  6,699
  7,045
Variable operating expenses, $m
  356
  386
  417
  449
  482
  517
  553
  591
  630
  670
  712
  756
  802
  849
  899
  951
  1,005
  1,061
  1,120
  1,182
  1,246
  1,314
  1,384
  1,458
  1,535
  1,616
  1,701
  1,789
  1,882
  1,980
Fixed operating expenses, $m
  452
  462
  472
  482
  493
  504
  515
  526
  538
  549
  562
  574
  587
  599
  613
  626
  640
  654
  668
  683
  698
  713
  729
  745
  762
  778
  795
  813
  831
  849
Total operating expenses, $m
  808
  848
  889
  931
  975
  1,021
  1,068
  1,117
  1,168
  1,219
  1,274
  1,330
  1,389
  1,448
  1,512
  1,577
  1,645
  1,715
  1,788
  1,865
  1,944
  2,027
  2,113
  2,203
  2,297
  2,394
  2,496
  2,602
  2,713
  2,829
Operating income, $m
  460
  526
  595
  667
  742
  820
  901
  985
  1,073
  1,165
  1,261
  1,361
  1,465
  1,574
  1,688
  1,807
  1,932
  2,062
  2,198
  2,341
  2,491
  2,648
  2,813
  2,986
  3,167
  3,357
  3,556
  3,766
  3,986
  4,217
EBITDA, $m
  3,826
  4,172
  4,533
  4,907
  5,297
  5,702
  6,123
  6,562
  7,017
  7,491
  7,985
  8,499
  9,035
  9,594
  10,177
  10,785
  11,420
  12,083
  12,776
  13,501
  14,259
  15,052
  15,882
  16,751
  17,661
  18,614
  19,613
  20,660
  21,758
  22,908
Interest expense (income), $m
  12
  1,356
  1,339
  1,458
  1,582
  1,711
  1,846
  1,985
  2,130
  2,281
  2,437
  2,600
  2,770
  2,946
  3,130
  3,322
  3,521
  3,730
  3,947
  4,174
  4,411
  4,659
  4,918
  5,189
  5,473
  5,769
  6,080
  6,405
  6,746
  7,102
  7,476
Earnings before tax, $m
  -896
  -812
  -863
  -915
  -970
  -1,026
  -1,084
  -1,145
  -1,207
  -1,272
  -1,339
  -1,409
  -1,481
  -1,556
  -1,634
  -1,714
  -1,798
  -1,885
  -1,976
  -2,070
  -2,168
  -2,270
  -2,376
  -2,487
  -2,603
  -2,723
  -2,849
  -2,980
  -3,117
  -3,260
Tax expense, $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
Net income, $m
  -896
  -812
  -863
  -915
  -970
  -1,026
  -1,084
  -1,145
  -1,207
  -1,272
  -1,339
  -1,409
  -1,481
  -1,556
  -1,634
  -1,714
  -1,798
  -1,885
  -1,976
  -2,070
  -2,168
  -2,270
  -2,376
  -2,487
  -2,603
  -2,723
  -2,849
  -2,980
  -3,117
  -3,260

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
  29,501
  31,958
  34,514
  37,170
  39,931
  42,800
  45,782
  48,881
  52,104
  55,456
  58,944
  62,576
  66,358
  70,300
  74,410
  78,698
  83,172
  87,844
  92,724
  97,824
  103,155
  108,730
  114,563
  120,667
  127,056
  133,747
  140,754
  148,094
  155,786
  163,847
Adjusted assets (=assets-cash), $m
  29,501
  31,958
  34,514
  37,170
  39,931
  42,800
  45,782
  48,881
  52,104
  55,456
  58,944
  62,576
  66,358
  70,300
  74,410
  78,698
  83,172
  87,844
  92,724
  97,824
  103,155
  108,730
  114,563
  120,667
  127,056
  133,747
  140,754
  148,094
  155,786
  163,847
Revenue / Adjusted assets
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
Average production assets, $m
  33,654
  36,457
  39,373
  42,404
  45,553
  48,826
  52,227
  55,763
  59,439
  63,263
  67,243
  71,386
  75,701
  80,198
  84,887
  89,778
  94,882
  100,212
  105,779
  111,596
  117,678
  124,039
  130,692
  137,656
  144,945
  152,577
  160,571
  168,945
  177,719
  186,915
Working capital, $m
  -30,196
  -32,711
  -35,327
  -38,047
  -40,873
  -43,809
  -46,861
  -50,033
  -53,332
  -56,763
  -60,333
  -64,051
  -67,923
  -71,957
  -76,164
  -80,553
  -85,133
  -89,915
  -94,910
  -100,130
  -105,587
  -111,293
  -117,264
  -123,511
  -130,051
  -136,899
  -144,072
  -151,585
  -159,458
  -167,709
Total debt, $m
  24,791
  27,003
  29,303
  31,694
  34,179
  36,761
  39,444
  42,234
  45,134
  48,151
  51,290
  54,559
  57,963
  61,511
  65,210
  69,069
  73,096
  77,300
  81,692
  86,282
  91,080
  96,098
  101,347
  106,841
  112,591
  118,613
  124,919
  131,525
  138,448
  145,703
Total liabilities, $m
  26,551
  28,762
  31,062
  33,453
  35,938
  38,520
  41,204
  43,993
  46,893
  49,910
  53,050
  56,318
  59,723
  63,270
  66,969
  70,828
  74,855
  79,060
  83,452
  88,041
  92,840
  97,857
  103,107
  108,600
  114,351
  120,372
  126,678
  133,285
  140,207
  147,462
Total equity, $m
  2,950
  3,196
  3,451
  3,717
  3,993
  4,280
  4,578
  4,888
  5,210
  5,546
  5,894
  6,258
  6,636
  7,030
  7,441
  7,870
  8,317
  8,784
  9,272
  9,782
  10,316
  10,873
  11,456
  12,067
  12,706
  13,375
  14,075
  14,809
  15,579
  16,385
Total liabilities and equity, $m
  29,501
  31,958
  34,513
  37,170
  39,931
  42,800
  45,782
  48,881
  52,103
  55,456
  58,944
  62,576
  66,359
  70,300
  74,410
  78,698
  83,172
  87,844
  92,724
  97,823
  103,156
  108,730
  114,563
  120,667
  127,057
  133,747
  140,753
  148,094
  155,786
  163,847
Debt-to-equity ratio
  8.400
  8.450
  8.490
  8.530
  8.560
  8.590
  8.620
  8.640
  8.660
  8.680
  8.700
  8.720
  8.730
  8.750
  8.760
  8.780
  8.790
  8.800
  8.810
  8.820
  8.830
  8.840
  8.850
  8.850
  8.860
  8.870
  8.880
  8.880
  8.890
  8.890
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -896
  -812
  -863
  -915
  -970
  -1,026
  -1,084
  -1,145
  -1,207
  -1,272
  -1,339
  -1,409
  -1,481
  -1,556
  -1,634
  -1,714
  -1,798
  -1,885
  -1,976
  -2,070
  -2,168
  -2,270
  -2,376
  -2,487
  -2,603
  -2,723
  -2,849
  -2,980
  -3,117
  -3,260
Depreciation, amort., depletion, $m
  3,365
  3,646
  3,937
  4,240
  4,555
  4,883
  5,223
  5,576
  5,944
  6,326
  6,724
  7,139
  7,570
  8,020
  8,489
  8,978
  9,488
  10,021
  10,578
  11,160
  11,768
  12,404
  13,069
  13,766
  14,494
  15,258
  16,057
  16,894
  17,772
  18,691
Funds from operations, $m
  2,470
  2,833
  3,074
  3,325
  3,586
  3,857
  4,138
  4,432
  4,737
  5,054
  5,385
  5,730
  6,089
  6,464
  6,855
  7,263
  7,690
  8,136
  8,602
  9,090
  9,600
  10,134
  10,693
  11,278
  11,892
  12,535
  13,208
  13,915
  14,655
  15,432
Change in working capital, $m
  -2,417
  -2,515
  -2,616
  -2,719
  -2,826
  -2,937
  -3,052
  -3,172
  -3,299
  -3,431
  -3,570
  -3,717
  -3,872
  -4,035
  -4,207
  -4,388
  -4,580
  -4,782
  -4,995
  -5,220
  -5,457
  -5,707
  -5,970
  -6,248
  -6,540
  -6,848
  -7,172
  -7,514
  -7,873
  -8,251
Cash from operations, $m
  4,886
  5,349
  5,690
  6,044
  6,412
  6,793
  7,190
  7,604
  8,035
  8,485
  8,955
  9,447
  9,961
  10,499
  11,062
  11,652
  12,270
  12,918
  13,597
  14,310
  15,057
  15,841
  16,663
  17,526
  18,432
  19,383
  20,380
  21,428
  22,528
  23,683
Maintenance CAPEX, $m
  -3,097
  -3,365
  -3,646
  -3,937
  -4,240
  -4,555
  -4,883
  -5,223
  -5,576
  -5,944
  -6,326
  -6,724
  -7,139
  -7,570
  -8,020
  -8,489
  -8,978
  -9,488
  -10,021
  -10,578
  -11,160
  -11,768
  -12,404
  -13,069
  -13,766
  -14,494
  -15,258
  -16,057
  -16,894
  -17,772
New CAPEX, $m
  -2,682
  -2,803
  -2,916
  -3,031
  -3,150
  -3,273
  -3,401
  -3,536
  -3,676
  -3,824
  -3,979
  -4,143
  -4,315
  -4,497
  -4,689
  -4,891
  -5,104
  -5,330
  -5,567
  -5,818
  -6,082
  -6,360
  -6,654
  -6,963
  -7,289
  -7,632
  -7,994
  -8,374
  -8,774
  -9,196
Cash from investing activities, $m
  -5,779
  -6,168
  -6,562
  -6,968
  -7,390
  -7,828
  -8,284
  -8,759
  -9,252
  -9,768
  -10,305
  -10,867
  -11,454
  -12,067
  -12,709
  -13,380
  -14,082
  -14,818
  -15,588
  -16,396
  -17,242
  -18,128
  -19,058
  -20,032
  -21,055
  -22,126
  -23,252
  -24,431
  -25,668
  -26,968
Free cash flow, $m
  -893
  -820
  -871
  -924
  -978
  -1,035
  -1,094
  -1,155
  -1,217
  -1,283
  -1,350
  -1,420
  -1,493
  -1,568
  -1,647
  -1,728
  -1,812
  -1,900
  -1,991
  -2,086
  -2,185
  -2,288
  -2,395
  -2,506
  -2,623
  -2,744
  -2,871
  -3,003
  -3,141
  -3,285
Issuance/(repayment) of debt, $m
  -322
  2,212
  2,300
  2,391
  2,485
  2,582
  2,683
  2,789
  2,900
  3,017
  3,139
  3,268
  3,404
  3,548
  3,699
  3,859
  4,027
  4,205
  4,392
  4,590
  4,798
  5,018
  5,249
  5,493
  5,751
  6,021
  6,306
  6,606
  6,922
  7,255
Issuance/(repurchase) of shares, $m
  3,846
  1,058
  1,118
  1,181
  1,246
  1,313
  1,383
  1,455
  1,530
  1,607
  1,688
  1,772
  1,859
  1,950
  2,045
  2,143
  2,246
  2,352
  2,464
  2,580
  2,701
  2,828
  2,960
  3,098
  3,242
  3,392
  3,550
  3,714
  3,886
  4,066
Cash from financing (excl. dividends), $m  
  3,524
  3,270
  3,418
  3,572
  3,731
  3,895
  4,066
  4,244
  4,430
  4,624
  4,827
  5,040
  5,263
  5,498
  5,744
  6,002
  6,273
  6,557
  6,856
  7,170
  7,499
  7,846
  8,209
  8,591
  8,993
  9,413
  9,856
  10,320
  10,808
  11,321
Total cash flow (excl. dividends), $m
  2,631
  2,450
  2,548
  2,648
  2,752
  2,860
  2,972
  3,090
  3,212
  3,342
  3,477
  3,620
  3,771
  3,930
  4,097
  4,274
  4,460
  4,657
  4,865
  5,084
  5,314
  5,558
  5,814
  6,085
  6,369
  6,669
  6,985
  7,317
  7,667
  8,035
Retained Cash Flow (-), $m
  -3,846
  -1,058
  -1,118
  -1,181
  -1,246
  -1,313
  -1,383
  -1,455
  -1,530
  -1,607
  -1,688
  -1,772
  -1,859
  -1,950
  -2,045
  -2,143
  -2,246
  -2,352
  -2,464
  -2,580
  -2,701
  -2,828
  -2,960
  -3,098
  -3,242
  -3,392
  -3,550
  -3,714
  -3,886
  -4,066
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
  13
  14
  15
  16
  18
  19
  20
  22
  23
  25
  26
  28
  30
  31
  33
  35
  37
  39
  42
  44
  46
  49
  51
  54
  57
  60
  63
  67
  70
  74
Cash available for distribution, $m
  -1,215
  1,392
  1,429
  1,467
  1,506
  1,547
  1,590
  1,635
  1,683
  1,734
  1,789
  1,848
  1,911
  1,979
  2,053
  2,131
  2,215
  2,305
  2,401
  2,504
  2,613
  2,730
  2,855
  2,987
  3,128
  3,277
  3,436
  3,604
  3,781
  3,970
Discount rate, %
  14.80
  15.54
  16.32
  17.13
  17.99
  18.89
  19.83
  20.83
  21.87
  22.96
  24.11
  25.31
  26.58
  27.91
  29.30
  30.77
  32.31
  33.92
  35.62
  37.40
  39.27
  41.23
  43.29
  45.46
  47.73
  50.12
  52.62
  55.26
  58.02
  60.92
PV of cash for distribution, $m
  -1,058
  1,042
  908
  779
  659
  548
  448
  360
  284
  220
  166
  123
  89
  63
  43
  29
  19
  12
  7
  4
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  36.8
  27.3
  20.3
  15.2
  11.4
  8.7
  6.6
  5.0
  3.8
  2.9
  2.3
  1.7
  1.3
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0

Cullen/Frost Bankers, Inc. is a financial holding company and a bank holding company. The Company, through its subsidiaries, provides a range of products and services throughout Texas markets. The Company's segments include Banking, Frost Wealth Advisors and Non-Banks. The Banking segment includes both commercial and consumer banking services, and Frost Insurance Agency. The Frost Wealth Advisors segment includes fee-based services within private trust, retirement services, and financial management services, including personal wealth management and securities brokerage services. The Non-Banks segment includes the direct and indirect ownership of its banking and non-banking subsidiaries and the issuance of debt and equity. It offers commercial and consumer banking services, as well as trust and investment management, insurance, brokerage, mutual funds, leasing, treasury management, capital markets advisory and item processing services.

FINANCIAL RATIOS  of  Cullen/Frost Bankers (CFR)

Valuation Ratios
P/E Ratio 24.1
Price to Sales 0
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 16.8
Price to Free Cash Flow 19.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.3%
Cap. Spend. - 3 Yr. Gr. Rate 6.2%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 40.4%
Total Debt to Equity 40.4%
Interest Coverage 29
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital 7.4%
Ret/ On T. Cap. - 3 Yr. Avg. 7.4%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 10.1%
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 10.9%
Eff/ Tax Rate - 3 Yr. Avg. 13.6%
Payout Ratio 47%

CFR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CFR stock intrinsic value calculation we used $1167 million for the last fiscal year's total revenue generated by Cullen/Frost Bankers. The default revenue input number comes from 2017 income statement of Cullen/Frost Bankers. 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 CFR stock valuation model: a) initial revenue growth rate of 8.7% 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 14.8%, whose default value for CFR is calculated based on our internal credit rating of Cullen/Frost Bankers, 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 Cullen/Frost Bankers.
    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 CFR stock the variable cost ratio is equal to 28.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $442 million in the base year in the intrinsic value calculation for CFR 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 Cullen/Frost Bankers.

Corporate tax rate of 27% is the nominal tax rate for Cullen/Frost Bankers. 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 CFR stock is equal to 1.1%.

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 CFR are equal to 2653%.

Life of production assets of 10 years is the average useful life of capital assets used in Cullen/Frost Bankers 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 CFR is equal to -2380.4%. 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 - $0 million for Cullen/Frost Bankers - 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 63 million for Cullen/Frost Bankers 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 Cullen/Frost Bankers at the current share price and the inputted number of shares is $7.3 billion.

RELATED COMPANIES Price Int.Val. Rating
IBTX Independent Ba 69.55 146.42  str.buy
BOKF BOK Financial 98.15 24.36  str.sell
TCBI Texas Capital 96.45 95.52  hold
VBTX Veritex Holdin 32.01 72.90  str.buy

COMPANY NEWS

▶ Cramer's Exec Cut: Business is bigger in Texas   [Jul-13-18 06:00PM  CNBC Videos]
▶ 5 Dividend Aristocrat ETFs for a Growing Retirement Income   [Jul-06-18 09:05AM  InvestorPlace]
▶ 5 Top Stocks to Buy in July   [Jul-02-18 09:34AM  Motley Fool]
▶ Construction crews celebrate topping out Frost Tower (Slideshow)   [Jun-22-18 03:01PM  American City Business Journals]
▶ May Top Value-Adding Stocks   [May-31-18 07:02AM  Simply Wall St.]
▶ Q1 commercial, industrial lending growth mixed at San Antonio banks (graphic)   [May-21-18 04:11PM  American City Business Journals]
▶ Jim Cramer Weighs In On T-Mobile, Skechers And More   [May-09-18 07:16AM  Benzinga]
▶ Cullen/Frost Bankers Boosts Its Dividend 17.5%   [Apr-27-18 01:36PM  Motley Fool]
▶ Cullen/Frost sets sights on business loans under $10M   [Apr-26-18 05:43PM  American City Business Journals]
▶ Phil Green and the future of Frost Bank   [05:08PM  American City Business Journals]
▶ Cullen/Frost Bank's new board member wants to bring 'a different perspective'   [Apr-25-18 02:46PM  American City Business Journals]
▶ Pay increases across the board for Cullen/Frost Bankers executives   [Mar-27-18 07:44AM  American City Business Journals]
▶ Corpus Christi warns residents of Frost Bank breach   [07:51AM  American City Business Journals]
▶ Frost Bank third-party software tool "commercial lockbox" breached   [Mar-16-18 06:05PM  American City Business Journals]
▶ Frost Bank profits grew 20 percent in 2017   [Jan-31-18 12:58PM  American City Business Journals]
▶ Two Frost Bank board seats open up   [12:56PM  American City Business Journals]
▶ Frost Bank adds new executives to C-suite   [12:54PM  American City Business Journals]
▶ Cullen/Frost Bankers Closes Out 2017 on a High Note   [Jan-27-18 10:36AM  Motley Fool]
▶ Cullen/Frost beats 4Q profit forecasts   [09:21AM  Associated Press]
▶ Best Stocks To Buy Now   [Jan-18-18 06:02AM  Simply Wall St.]
▶ Frost Bank reports results from latest stress test   [Nov-01-17 06:14PM  American City Business Journals]
▶ Cullen/Frost tops 3Q profit forecasts   [Oct-26-17 09:16AM  Associated Press]
▶ /C O R R E C T I O N -- Cullen/Frost Bankers, Inc./   [Oct-18-17 05:17PM  PR Newswire]
▶ 3 High-Yield Bank Stocks   [Oct-09-17 06:00AM  Motley Fool]
▶ Regional banks to take a hit from Hurricane Harvey   [Aug-29-17 02:34PM  CNBC Videos]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.