Intrinsic value of Calumet Specialty Products Partners, L.P - CLMT

Previous Close

$4.17

  Intrinsic Value

$4.05

stock screener

  Rating & Target

hold

-3%

Previous close

$4.17

 
Intrinsic value

$4.05

 
Up/down potential

-3%

 
Rating

hold

We calculate the intrinsic value of CLMT 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, %
  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
  3,568
  3,650
  3,744
  3,849
  3,966
  4,094
  4,233
  4,384
  4,547
  4,721
  4,908
  5,107
  5,319
  5,545
  5,784
  6,037
  6,306
  6,589
  6,889
  7,206
  7,540
  7,892
  8,263
  8,654
  9,066
  9,500
  9,957
  10,437
  10,943
  11,474
Variable operating expenses, $m
  3,102
  3,171
  3,249
  3,338
  3,436
  3,543
  3,660
  3,786
  3,923
  4,069
  4,116
  4,283
  4,461
  4,650
  4,850
  5,063
  5,288
  5,526
  5,777
  6,043
  6,323
  6,618
  6,930
  7,258
  7,603
  7,967
  8,350
  8,753
  9,177
  9,623
Fixed operating expenses, $m
  346
  354
  362
  370
  378
  386
  395
  403
  412
  421
  431
  440
  450
  460
  470
  480
  491
  502
  513
  524
  535
  547
  559
  572
  584
  597
  610
  623
  637
  651
Total operating expenses, $m
  3,448
  3,525
  3,611
  3,708
  3,814
  3,929
  4,055
  4,189
  4,335
  4,490
  4,547
  4,723
  4,911
  5,110
  5,320
  5,543
  5,779
  6,028
  6,290
  6,567
  6,858
  7,165
  7,489
  7,830
  8,187
  8,564
  8,960
  9,376
  9,814
  10,274
Operating income, $m
  120
  125
  133
  142
  152
  165
  179
  194
  212
  231
  361
  384
  409
  435
  464
  494
  527
  562
  599
  639
  681
  727
  774
  825
  879
  936
  997
  1,061
  1,129
  1,201
EBITDA, $m
  339
  347
  357
  369
  383
  400
  418
  438
  461
  485
  512
  540
  571
  605
  641
  679
  720
  763
  810
  860
  912
  968
  1,027
  1,090
  1,157
  1,227
  1,301
  1,380
  1,464
  1,552
Interest expense (income), $m
  130
  140
  130
  133
  137
  142
  147
  153
  159
  166
  173
  181
  189
  197
  207
  217
  227
  238
  250
  263
  276
  290
  305
  320
  336
  354
  372
  391
  411
  432
  454
Earnings before tax, $m
  -21
  -5
  -1
  4
  10
  17
  26
  35
  46
  58
  181
  195
  211
  228
  247
  267
  288
  312
  336
  363
  392
  422
  454
  489
  525
  564
  606
  650
  697
  746
Tax expense, $m
  0
  0
  0
  1
  3
  5
  7
  10
  12
  16
  49
  53
  57
  62
  67
  72
  78
  84
  91
  98
  106
  114
  123
  132
  142
  152
  164
  175
  188
  201
Net income, $m
  -21
  -5
  -1
  3
  7
  13
  19
  26
  34
  42
  132
  143
  154
  167
  180
  195
  211
  227
  246
  265
  286
  308
  332
  357
  384
  412
  442
  474
  509
  545

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
  2,129
  2,178
  2,234
  2,297
  2,366
  2,443
  2,526
  2,616
  2,713
  2,817
  2,928
  3,047
  3,174
  3,308
  3,451
  3,602
  3,762
  3,932
  4,110
  4,299
  4,499
  4,709
  4,930
  5,164
  5,410
  5,668
  5,941
  6,227
  6,529
  6,846
Adjusted assets (=assets-cash), $m
  2,129
  2,178
  2,234
  2,297
  2,366
  2,443
  2,526
  2,616
  2,713
  2,817
  2,928
  3,047
  3,174
  3,308
  3,451
  3,602
  3,762
  3,932
  4,110
  4,299
  4,499
  4,709
  4,930
  5,164
  5,410
  5,668
  5,941
  6,227
  6,529
  6,846
Revenue / Adjusted assets
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
  1.676
Average production assets, $m
  1,288
  1,318
  1,352
  1,390
  1,432
  1,478
  1,528
  1,583
  1,641
  1,704
  1,772
  1,844
  1,920
  2,002
  2,088
  2,179
  2,276
  2,379
  2,487
  2,601
  2,722
  2,849
  2,983
  3,124
  3,273
  3,430
  3,594
  3,768
  3,950
  4,142
Working capital, $m
  193
  197
  202
  208
  214
  221
  229
  237
  246
  255
  265
  276
  287
  299
  312
  326
  341
  356
  372
  389
  407
  426
  446
  467
  490
  513
  538
  564
  591
  620
Total debt, $m
  1,582
  1,626
  1,676
  1,733
  1,796
  1,864
  1,939
  2,020
  2,108
  2,201
  2,302
  2,409
  2,522
  2,643
  2,772
  2,908
  3,052
  3,204
  3,365
  3,535
  3,715
  3,904
  4,103
  4,313
  4,535
  4,768
  5,013
  5,271
  5,542
  5,828
Total liabilities, $m
  1,916
  1,960
  2,010
  2,067
  2,130
  2,198
  2,273
  2,354
  2,442
  2,535
  2,636
  2,743
  2,856
  2,977
  3,106
  3,242
  3,386
  3,538
  3,699
  3,869
  4,049
  4,238
  4,437
  4,647
  4,869
  5,102
  5,347
  5,605
  5,876
  6,162
Total equity, $m
  213
  218
  223
  230
  237
  244
  253
  262
  271
  282
  293
  305
  317
  331
  345
  360
  376
  393
  411
  430
  450
  471
  493
  516
  541
  567
  594
  623
  653
  685
Total liabilities and equity, $m
  2,129
  2,178
  2,233
  2,297
  2,367
  2,442
  2,526
  2,616
  2,713
  2,817
  2,929
  3,048
  3,173
  3,308
  3,451
  3,602
  3,762
  3,931
  4,110
  4,299
  4,499
  4,709
  4,930
  5,163
  5,410
  5,669
  5,941
  6,228
  6,529
  6,847
Debt-to-equity ratio
  7.430
  7.470
  7.500
  7.550
  7.590
  7.630
  7.680
  7.720
  7.770
  7.810
  7.860
  7.900
  7.950
  7.990
  8.030
  8.070
  8.110
  8.150
  8.190
  8.220
  8.260
  8.290
  8.320
  8.350
  8.380
  8.410
  8.440
  8.460
  8.490
  8.510
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
  -21
  -5
  -1
  3
  7
  13
  19
  26
  34
  42
  132
  143
  154
  167
  180
  195
  211
  227
  246
  265
  286
  308
  332
  357
  384
  412
  442
  474
  509
  545
Depreciation, amort., depletion, $m
  219
  221
  224
  228
  231
  235
  239
  244
  249
  254
  150
  156
  163
  170
  177
  185
  193
  202
  211
  220
  231
  241
  253
  265
  277
  291
  305
  319
  335
  351
Funds from operations, $m
  198
  217
  224
  231
  239
  248
  258
  270
  282
  297
  282
  299
  317
  336
  357
  380
  403
  429
  456
  486
  516
  549
  584
  622
  661
  703
  747
  794
  843
  896
Change in working capital, $m
  4
  4
  5
  6
  6
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
Cash from operations, $m
  195
  213
  218
  225
  232
  241
  251
  262
  274
  287
  272
  288
  305
  324
  344
  366
  389
  414
  440
  468
  498
  530
  564
  600
  639
  679
  722
  768
  816
  867
Maintenance CAPEX, $m
  -107
  -109
  -112
  -115
  -118
  -121
  -125
  -130
  -134
  -139
  -144
  -150
  -156
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -231
  -241
  -253
  -265
  -277
  -291
  -305
  -319
  -335
New CAPEX, $m
  -25
  -30
  -34
  -38
  -42
  -46
  -50
  -54
  -59
  -63
  -67
  -72
  -77
  -81
  -86
  -92
  -97
  -102
  -108
  -114
  -121
  -127
  -134
  -141
  -149
  -157
  -165
  -173
  -182
  -192
Cash from investing activities, $m
  -132
  -139
  -146
  -153
  -160
  -167
  -175
  -184
  -193
  -202
  -211
  -222
  -233
  -244
  -256
  -269
  -282
  -295
  -310
  -325
  -341
  -358
  -375
  -394
  -414
  -434
  -456
  -478
  -501
  -527
Free cash flow, $m
  63
  74
  73
  72
  72
  73
  75
  78
  81
  85
  60
  66
  73
  80
  88
  97
  107
  118
  130
  143
  157
  173
  189
  206
  225
  245
  267
  290
  314
  340
Issuance/(repayment) of debt, $m
  -128
  44
  50
  57
  63
  69
  75
  81
  87
  94
  100
  107
  114
  121
  128
  136
  144
  152
  161
  170
  179
  189
  199
  210
  221
  233
  245
  258
  271
  286
Issuance/(repurchase) of shares, $m
  190
  9
  6
  3
  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  
  62
  53
  56
  60
  63
  69
  75
  81
  87
  94
  100
  107
  114
  121
  128
  136
  144
  152
  161
  170
  179
  189
  199
  210
  221
  233
  245
  258
  271
  286
Total cash flow (excl. dividends), $m
  125
  127
  130
  132
  135
  142
  150
  159
  168
  179
  161
  173
  186
  201
  217
  233
  252
  271
  291
  313
  337
  362
  388
  416
  446
  478
  512
  548
  586
  626
Retained Cash Flow (-), $m
  -190
  -9
  -6
  -6
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
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
  -65
  118
  123
  126
  128
  134
  142
  150
  158
  168
  149
  161
  174
  188
  202
  218
  235
  254
  273
  294
  317
  341
  366
  393
  422
  452
  485
  519
  556
  594
Discount rate, %
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.06
  25.27
  26.53
  27.86
  29.25
  30.71
  32.25
  33.86
  35.55
  37.33
  39.20
  41.16
  43.22
  45.38
  47.65
  50.03
  52.53
  55.16
PV of cash for distribution, $m
  -57
  91
  82
  71
  60
  52
  45
  38
  31
  25
  17
  14
  11
  8
  6
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  63.0
  62.6
  62.4
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2
  62.2

Calumet Specialty Products Partners, L.P. is a producer of specialty hydrocarbon products in North America. The Company operates through three segments: specialty products, fuel products and oilfield services. In its specialty products segment, the Company processes crude oil and other feedstocks into a range of customized lubricating oils, white mineral oils, solvents, petrolatums and waxes. Its specialty products are sold to domestic and international customers using its products as raw material components for basic industrial, consumer and automotive goods. It also blends and market specialty products through its Royal Purple, Bel-Ray, TruFuel and Quantum brands. In its fuel products segment, the Company processes crude oil into a range of fuel and fuel-related products, including gasoline, diesel, jet fuel, asphalt and heavy fuel oils, and resells purchased crude oil to third-party customers.

FINANCIAL RATIOS  of  Calumet Specialty Products Partners, L.P (CLMT)

Valuation Ratios
P/E Ratio -1
Price to Sales 0.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 79.6
Price to Free Cash Flow -2.4
Growth Rates
Sales Growth Rate -14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -59%
Cap. Spend. - 3 Yr. Gr. Rate -2.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 910%
Total Debt to Equity 911.9%
Interest Coverage -2
Management Effectiveness
Return On Assets -7.1%
Ret/ On Assets - 3 Yr. Avg. -2.9%
Return On Total Capital -14.3%
Ret/ On T. Cap. - 3 Yr. Avg. -8.3%
Return On Equity -80%
Return On Equity - 3 Yr. Avg. -37.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 11.3%
Gross Margin - 3 Yr. Avg. 11.5%
EBITDA Margin -1%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin -4.8%
Oper. Margin - 3 Yr. Avg. -2.1%
Pre-Tax Margin -9.3%
Pre-Tax Margin - 3 Yr. Avg. -5.1%
Net Profit Margin -9.1%
Net Profit Margin - 3 Yr. Avg. -4.8%
Effective Tax Rate 2.1%
Eff/ Tax Rate - 3 Yr. Avg. 6.7%
Payout Ratio -17.3%

CLMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLMT stock intrinsic value calculation we used $3498 million for the last fiscal year's total revenue generated by Calumet Specialty Products Partners, L.P. The default revenue input number comes from 0001 income statement of Calumet Specialty Products Partners, L.P. 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 CLMT 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 13.4%, whose default value for CLMT is calculated based on our internal credit rating of Calumet Specialty Products Partners, L.P, 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 Calumet Specialty Products Partners, L.P.
    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 CLMT stock the variable cost ratio is equal to 87%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $339 million in the base year in the intrinsic value calculation for CLMT 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 8.2% for Calumet Specialty Products Partners, L.P.

Corporate tax rate of 27% is the nominal tax rate for Calumet Specialty Products Partners, L.P. 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 CLMT 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 CLMT are equal to 36.1%.

Life of production assets of 11.8 years is the average useful life of capital assets used in Calumet Specialty Products Partners, L.P 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 CLMT is equal to 5.4%. 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 - $43.7 million for Calumet Specialty Products Partners, L.P - 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 77.469 million for Calumet Specialty Products Partners, L.P 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 Calumet Specialty Products Partners, L.P at the current share price and the inputted number of shares is $0.3 billion.

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