Intrinsic value of Coca-Cola Consolidated, Inc. - COKE

Previous Close

$364.81

  Intrinsic Value

$108.99

stock screener

  Rating & Target

str. sell

-70%

Previous close

$364.81

 
Intrinsic value

$108.99

 
Up/down potential

-70%

 
Rating

str. sell

We calculate the intrinsic value of COKE 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 3.4

 

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, %
  2.20
  2.48
  2.73
  2.96
  3.16
  3.35
  3.51
  3.66
  3.79
  3.92
  4.02
  4.12
  4.21
  4.29
  4.36
  4.42
  4.48
  4.53
  4.58
  4.62
  4.66
  4.69
  4.72
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
Revenue, $m
  4,727
  4,844
  4,976
  5,124
  5,286
  5,462
  5,654
  5,861
  6,084
  6,322
  6,576
  6,847
  7,136
  7,442
  7,766
  8,109
  8,473
  8,857
  9,263
  9,691
  10,142
  10,618
  11,120
  11,648
  12,205
  12,790
  13,407
  14,055
  14,737
  15,455
Variable operating expenses, $m
  4,611
  4,723
  4,849
  4,990
  5,144
  5,313
  5,496
  5,694
  5,906
  6,133
  6,274
  6,533
  6,808
  7,100
  7,409
  7,737
  8,084
  8,450
  8,837
  9,246
  9,676
  10,131
  10,609
  11,113
  11,644
  12,203
  12,791
  13,410
  14,061
  14,745
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
  4,611
  4,723
  4,849
  4,990
  5,144
  5,313
  5,496
  5,694
  5,906
  6,133
  6,274
  6,533
  6,808
  7,100
  7,409
  7,737
  8,084
  8,450
  8,837
  9,246
  9,676
  10,131
  10,609
  11,113
  11,644
  12,203
  12,791
  13,410
  14,061
  14,745
Operating income, $m
  116
  121
  127
  134
  141
  149
  158
  168
  178
  189
  302
  314
  328
  342
  357
  372
  389
  407
  425
  445
  466
  488
  511
  535
  560
  587
  616
  645
  677
  710
EBITDA, $m
  342
  351
  360
  371
  383
  396
  410
  425
  441
  458
  476
  496
  517
  539
  563
  587
  614
  642
  671
  702
  735
  769
  805
  844
  884
  926
  971
  1,018
  1,068
  1,119
Interest expense (income), $m
  35
  62
  65
  68
  72
  77
  82
  87
  93
  100
  107
  114
  122
  130
  139
  149
  159
  169
  181
  192
  205
  218
  232
  247
  263
  279
  296
  314
  333
  353
  375
Earnings before tax, $m
  54
  56
  59
  62
  64
  68
  71
  74
  78
  82
  188
  193
  197
  203
  208
  214
  220
  226
  233
  240
  247
  255
  264
  272
  282
  291
  301
  312
  323
  335
Tax expense, $m
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  51
  52
  53
  55
  56
  58
  59
  61
  63
  65
  67
  69
  71
  74
  76
  79
  81
  84
  87
  91
Net income, $m
  40
  41
  43
  45
  47
  49
  52
  54
  57
  60
  137
  141
  144
  148
  152
  156
  160
  165
  170
  175
  181
  186
  192
  199
  206
  213
  220
  228
  236
  245

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
  3,075
  3,152
  3,238
  3,333
  3,439
  3,554
  3,679
  3,813
  3,958
  4,113
  4,279
  4,455
  4,643
  4,842
  5,053
  5,276
  5,513
  5,763
  6,026
  6,305
  6,599
  6,908
  7,235
  7,579
  7,941
  8,322
  8,723
  9,145
  9,588
  10,055
Adjusted assets (=assets-cash), $m
  3,075
  3,152
  3,238
  3,333
  3,439
  3,554
  3,679
  3,813
  3,958
  4,113
  4,279
  4,455
  4,643
  4,842
  5,053
  5,276
  5,513
  5,763
  6,026
  6,305
  6,599
  6,908
  7,235
  7,579
  7,941
  8,322
  8,723
  9,145
  9,588
  10,055
Revenue / Adjusted assets
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
Average production assets, $m
  1,617
  1,657
  1,702
  1,752
  1,808
  1,868
  1,934
  2,005
  2,081
  2,162
  2,249
  2,342
  2,440
  2,545
  2,656
  2,773
  2,898
  3,029
  3,168
  3,314
  3,469
  3,631
  3,803
  3,984
  4,174
  4,374
  4,585
  4,807
  5,040
  5,286
Working capital, $m
  194
  199
  204
  210
  217
  224
  232
  240
  249
  259
  270
  281
  293
  305
  318
  332
  347
  363
  380
  397
  416
  435
  456
  478
  500
  524
  550
  576
  604
  634
Total debt, $m
  1,197
  1,264
  1,340
  1,425
  1,518
  1,619
  1,729
  1,848
  1,975
  2,112
  2,257
  2,413
  2,578
  2,753
  2,939
  3,136
  3,345
  3,565
  3,797
  4,043
  4,301
  4,574
  4,862
  5,165
  5,484
  5,819
  6,173
  6,544
  6,935
  7,347
Total liabilities, $m
  2,709
  2,777
  2,852
  2,937
  3,030
  3,131
  3,241
  3,360
  3,487
  3,624
  3,770
  3,925
  4,090
  4,265
  4,451
  4,648
  4,857
  5,077
  5,309
  5,555
  5,813
  6,086
  6,374
  6,677
  6,996
  7,331
  7,685
  8,056
  8,447
  8,859
Total equity, $m
  366
  375
  385
  397
  409
  423
  438
  454
  471
  489
  509
  530
  552
  576
  601
  628
  656
  686
  717
  750
  785
  822
  861
  902
  945
  990
  1,038
  1,088
  1,141
  1,197
Total liabilities and equity, $m
  3,075
  3,152
  3,237
  3,334
  3,439
  3,554
  3,679
  3,814
  3,958
  4,113
  4,279
  4,455
  4,642
  4,841
  5,052
  5,276
  5,513
  5,763
  6,026
  6,305
  6,598
  6,908
  7,235
  7,579
  7,941
  8,321
  8,723
  9,144
  9,588
  10,056
Debt-to-equity ratio
  3.270
  3.370
  3.480
  3.590
  3.710
  3.830
  3.950
  4.070
  4.190
  4.310
  4.430
  4.550
  4.670
  4.780
  4.890
  5.000
  5.100
  5.200
  5.290
  5.390
  5.480
  5.560
  5.650
  5.730
  5.800
  5.880
  5.950
  6.010
  6.080
  6.140
Adjusted equity ratio
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  40
  41
  43
  45
  47
  49
  52
  54
  57
  60
  137
  141
  144
  148
  152
  156
  160
  165
  170
  175
  181
  186
  192
  199
  206
  213
  220
  228
  236
  245
Depreciation, amort., depletion, $m
  227
  230
  233
  237
  242
  246
  251
  257
  263
  269
  174
  182
  189
  197
  206
  215
  225
  235
  246
  257
  269
  282
  295
  309
  324
  339
  355
  373
  391
  410
Funds from operations, $m
  266
  271
  276
  282
  289
  296
  303
  311
  320
  329
  312
  322
  333
  345
  358
  371
  385
  400
  416
  432
  450
  468
  487
  508
  529
  552
  575
  601
  627
  654
Change in working capital, $m
  4
  5
  5
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
Cash from operations, $m
  262
  266
  271
  276
  282
  288
  295
  303
  311
  319
  301
  311
  321
  333
  344
  357
  370
  384
  399
  415
  431
  448
  467
  486
  506
  528
  550
  574
  599
  625
Maintenance CAPEX, $m
  -123
  -125
  -128
  -132
  -136
  -140
  -145
  -150
  -155
  -161
  -168
  -174
  -182
  -189
  -197
  -206
  -215
  -225
  -235
  -246
  -257
  -269
  -282
  -295
  -309
  -324
  -339
  -355
  -373
  -391
New CAPEX, $m
  -33
  -40
  -45
  -50
  -55
  -60
  -66
  -71
  -76
  -81
  -87
  -93
  -99
  -105
  -111
  -117
  -124
  -131
  -139
  -146
  -154
  -163
  -172
  -181
  -190
  -200
  -211
  -222
  -233
  -245
Cash from investing activities, $m
  -156
  -165
  -173
  -182
  -191
  -200
  -211
  -221
  -231
  -242
  -255
  -267
  -281
  -294
  -308
  -323
  -339
  -356
  -374
  -392
  -411
  -432
  -454
  -476
  -499
  -524
  -550
  -577
  -606
  -636
Free cash flow, $m
  106
  101
  97
  94
  91
  88
  85
  82
  79
  77
  47
  44
  41
  39
  36
  34
  31
  28
  25
  23
  20
  17
  14
  10
  7
  4
  0
  -3
  -7
  -11
Issuance/(repayment) of debt, $m
  58
  67
  76
  84
  93
  101
  110
  119
  127
  137
  146
  155
  165
  175
  186
  197
  208
  220
  233
  245
  259
  273
  288
  303
  319
  336
  353
  372
  391
  411
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  
  58
  67
  76
  84
  93
  101
  110
  119
  127
  137
  146
  155
  165
  175
  186
  197
  208
  220
  233
  245
  259
  273
  288
  303
  319
  336
  353
  372
  391
  411
Total cash flow (excl. dividends), $m
  164
  168
  173
  178
  184
  189
  195
  201
  207
  213
  192
  199
  207
  214
  222
  230
  239
  248
  258
  268
  279
  290
  301
  313
  326
  340
  354
  368
  384
  400
Retained Cash Flow (-), $m
  -8
  -9
  -10
  -11
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
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
  156
  159
  163
  167
  171
  175
  180
  185
  189
  195
  173
  178
  184
  190
  197
  204
  211
  219
  227
  235
  244
  253
  262
  272
  283
  294
  306
  318
  331
  345
Discount rate, %
  10.60
  11.13
  11.69
  12.27
  12.88
  13.53
  14.21
  14.92
  15.66
  16.44
  17.27
  18.13
  19.04
  19.99
  20.99
  22.04
  23.14
  24.30
  25.51
  26.79
  28.12
  29.53
  31.01
  32.56
  34.19
  35.90
  37.69
  39.57
  41.55
  43.63
PV of cash for distribution, $m
  141
  129
  117
  105
  93
  82
  71
  61
  51
  42
  30
  24
  19
  15
  11
  8
  6
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
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

Coca-Cola Bottling Co. Consolidated produces, markets and distributes nonalcoholic beverages. The Company is an independent Coca-Cola bottler in the United States. The Company's segments include Nonalcoholic Beverages and All Other. Majority of its total bottle/can volume to retail customers consist of products of The Coca-Cola Company. It also distributes products for various other beverage brands, including Dr Pepper, Sundrop and Monster Energy. The Company's product offerings include both sparkling and still beverages. Sparkling beverages are carbonated beverages and the Company's principal sparkling beverage is Coca-Cola. Still beverages include energy products and noncarbonated beverages, such as bottled water, tea, ready to drink coffee, enhanced water, juices and sports drinks. There are two main categories of sales, which include bottle/can sales and other sales.

FINANCIAL RATIOS  of  Coca-Cola Consolidated, Inc. (COKE)

Valuation Ratios
P/E Ratio 67.9
Price to Sales 1.1
Price to Book 12.3
Price to Tangible Book
Price to Cash Flow 21
Price to Free Cash Flow -308.8
Growth Rates
Sales Growth Rate 36.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.5%
Cap. Spend. - 3 Yr. Gr. Rate 23.2%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 342.2%
Total Debt to Equity 345.1%
Interest Coverage 4
Management Effectiveness
Return On Assets 3.3%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 19.2%
Return On Equity - 3 Yr. Avg. 21.1%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 38.5%
Gross Margin - 3 Yr. Avg. 39.3%
EBITDA Margin 7.8%
EBITDA Margin - 3 Yr. Avg. 8.3%
Operating Margin 4.1%
Oper. Margin - 3 Yr. Avg. 5%
Pre-Tax Margin 2.9%
Pre-Tax Margin - 3 Yr. Avg. 3.5%
Net Profit Margin 1.6%
Net Profit Margin - 3 Yr. Avg. 2%
Effective Tax Rate 38.7%
Eff/ Tax Rate - 3 Yr. Avg. 36.3%
Payout Ratio 18%

COKE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the COKE stock intrinsic value calculation we used $4625 million for the last fiscal year's total revenue generated by Coca-Cola Consolidated, Inc.. The default revenue input number comes from 0001 income statement of Coca-Cola Consolidated, Inc.. 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 COKE stock valuation model: a) initial revenue growth rate of 2.2% 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 10.6%, whose default value for COKE is calculated based on our internal credit rating of Coca-Cola Consolidated, Inc., 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 Coca-Cola Consolidated, Inc..
    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 COKE stock the variable cost ratio is equal to 97.6%.

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 COKE 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 Coca-Cola Consolidated, Inc..

Corporate tax rate of 27% is the nominal tax rate for Coca-Cola Consolidated, Inc.. 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 COKE 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 COKE are equal to 34.2%.

Life of production assets of 12.9 years is the average useful life of capital assets used in Coca-Cola Consolidated, Inc. 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 COKE is equal to 4.1%. 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 - $358.187 million for Coca-Cola Consolidated, Inc. - 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 9.350 million for Coca-Cola Consolidated, Inc. 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 Coca-Cola Consolidated, Inc. at the current share price and the inputted number of shares is $3.4 billion.

RELATED COMPANIES Price Int.Val. Rating
KO Coca-Cola Comp 54.41 16.24  str.sell
PEP Pepsico, Inc. 131.76 87.80  sell
FIZZ National Bever 42.69 46.13  sell
COT Cott Corporati 12.44 14.40  hold
KOF Coca Cola Fems 59.02 130.68  str.buy

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