Intrinsic value of Constellium N.V. - CSTM

Previous Close

$10.22

  Intrinsic Value

$6.11

stock screener

  Rating & Target

sell

-40%

Previous close

$10.22

 
Intrinsic value

$6.11

 
Up/down potential

-40%

 
Rating

sell

We calculate the intrinsic value of CSTM 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 1.4

 

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, %
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.69
  4.72
  4.75
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
Revenue, $m
  6,797
  7,076
  7,373
  7,688
  8,021
  8,375
  8,749
  9,145
  9,563
  10,004
  10,469
  10,960
  11,477
  12,022
  12,595
  13,199
  13,835
  14,503
  15,207
  15,946
  16,724
  17,542
  18,402
  19,306
  20,256
  21,254
  22,303
  23,405
  24,563
  25,780
Variable operating expenses, $m
  5,184
  5,394
  5,618
  5,856
  6,108
  6,374
  6,657
  6,955
  7,270
  7,603
  7,897
  8,268
  8,658
  9,068
  9,501
  9,957
  10,436
  10,940
  11,471
  12,029
  12,616
  13,233
  13,881
  14,563
  15,280
  16,033
  16,824
  17,655
  18,529
  19,447
Fixed operating expenses, $m
  1,131
  1,156
  1,182
  1,208
  1,234
  1,261
  1,289
  1,318
  1,346
  1,376
  1,406
  1,437
  1,469
  1,501
  1,534
  1,568
  1,603
  1,638
  1,674
  1,711
  1,748
  1,787
  1,826
  1,866
  1,907
  1,949
  1,992
  2,036
  2,081
  2,127
Total operating expenses, $m
  6,315
  6,550
  6,800
  7,064
  7,342
  7,635
  7,946
  8,273
  8,616
  8,979
  9,303
  9,705
  10,127
  10,569
  11,035
  11,525
  12,039
  12,578
  13,145
  13,740
  14,364
  15,020
  15,707
  16,429
  17,187
  17,982
  18,816
  19,691
  20,610
  21,574
Operating income, $m
  482
  525
  573
  624
  680
  739
  804
  872
  946
  1,025
  1,165
  1,255
  1,350
  1,452
  1,560
  1,674
  1,796
  1,925
  2,062
  2,207
  2,360
  2,523
  2,695
  2,876
  3,069
  3,272
  3,487
  3,714
  3,953
  4,207
EBITDA, $m
  748
  800
  856
  917
  983
  1,054
  1,129
  1,210
  1,297
  1,389
  1,487
  1,592
  1,703
  1,822
  1,947
  2,080
  2,221
  2,371
  2,529
  2,697
  2,874
  3,062
  3,260
  3,470
  3,692
  3,926
  4,173
  4,433
  4,709
  4,999
Interest expense (income), $m
  184
  139
  116
  125
  135
  146
  157
  169
  181
  194
  208
  223
  238
  255
  272
  290
  309
  329
  350
  373
  396
  421
  447
  474
  503
  533
  565
  598
  633
  670
  708
Earnings before tax, $m
  343
  410
  448
  489
  534
  583
  635
  691
  752
  817
  943
  1,017
  1,096
  1,180
  1,270
  1,365
  1,467
  1,575
  1,689
  1,811
  1,939
  2,076
  2,221
  2,374
  2,536
  2,707
  2,889
  3,081
  3,284
  3,498
Tax expense, $m
  93
  111
  121
  132
  144
  157
  171
  187
  203
  221
  255
  275
  296
  319
  343
  369
  396
  425
  456
  489
  524
  560
  600
  641
  685
  731
  780
  832
  887
  945
Net income, $m
  250
  299
  327
  357
  390
  425
  464
  505
  549
  596
  688
  742
  800
  861
  927
  997
  1,071
  1,149
  1,233
  1,322
  1,416
  1,515
  1,621
  1,733
  1,851
  1,976
  2,109
  2,249
  2,397
  2,554

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
  4,662
  4,853
  5,057
  5,273
  5,502
  5,744
  6,001
  6,272
  6,559
  6,861
  7,181
  7,517
  7,872
  8,245
  8,639
  9,053
  9,489
  9,947
  10,430
  10,937
  11,471
  12,032
  12,621
  13,241
  13,893
  14,578
  15,297
  16,053
  16,847
  17,682
Adjusted assets (=assets-cash), $m
  4,662
  4,853
  5,057
  5,273
  5,502
  5,744
  6,001
  6,272
  6,559
  6,861
  7,181
  7,517
  7,872
  8,245
  8,639
  9,053
  9,489
  9,947
  10,430
  10,937
  11,471
  12,032
  12,621
  13,241
  13,893
  14,578
  15,297
  16,053
  16,847
  17,682
Revenue / Adjusted assets
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
  1.458
Average production assets, $m
  2,236
  2,328
  2,426
  2,529
  2,639
  2,755
  2,879
  3,009
  3,146
  3,291
  3,444
  3,606
  3,776
  3,955
  4,144
  4,342
  4,552
  4,772
  5,003
  5,246
  5,502
  5,771
  6,054
  6,352
  6,664
  6,993
  7,338
  7,700
  8,081
  8,482
Working capital, $m
  272
  283
  295
  308
  321
  335
  350
  366
  383
  400
  419
  438
  459
  481
  504
  528
  553
  580
  608
  638
  669
  702
  736
  772
  810
  850
  892
  936
  983
  1,031
Total debt, $m
  2,147
  2,319
  2,502
  2,696
  2,902
  3,120
  3,351
  3,596
  3,854
  4,126
  4,413
  4,716
  5,035
  5,371
  5,725
  6,098
  6,490
  6,903
  7,337
  7,794
  8,274
  8,779
  9,310
  9,868
  10,454
  11,070
  11,718
  12,398
  13,113
  13,864
Total liabilities, $m
  4,196
  4,368
  4,551
  4,745
  4,952
  5,170
  5,401
  5,645
  5,903
  6,175
  6,463
  6,765
  7,085
  7,421
  7,775
  8,148
  8,540
  8,953
  9,387
  9,843
  10,324
  10,829
  11,359
  11,917
  12,504
  13,120
  13,767
  14,448
  15,162
  15,913
Total equity, $m
  466
  485
  506
  527
  550
  574
  600
  627
  656
  686
  718
  752
  787
  825
  864
  905
  949
  995
  1,043
  1,094
  1,147
  1,203
  1,262
  1,324
  1,389
  1,458
  1,530
  1,605
  1,685
  1,768
Total liabilities and equity, $m
  4,662
  4,853
  5,057
  5,272
  5,502
  5,744
  6,001
  6,272
  6,559
  6,861
  7,181
  7,517
  7,872
  8,246
  8,639
  9,053
  9,489
  9,948
  10,430
  10,937
  11,471
  12,032
  12,621
  13,241
  13,893
  14,578
  15,297
  16,053
  16,847
  17,681
Debt-to-equity ratio
  4.600
  4.780
  4.950
  5.110
  5.270
  5.430
  5.580
  5.730
  5.880
  6.010
  6.150
  6.270
  6.400
  6.510
  6.630
  6.740
  6.840
  6.940
  7.040
  7.130
  7.210
  7.300
  7.380
  7.450
  7.520
  7.590
  7.660
  7.720
  7.780
  7.840
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
  250
  299
  327
  357
  390
  425
  464
  505
  549
  596
  688
  742
  800
  861
  927
  997
  1,071
  1,149
  1,233
  1,322
  1,416
  1,515
  1,621
  1,733
  1,851
  1,976
  2,109
  2,249
  2,397
  2,554
Depreciation, amort., depletion, $m
  266
  274
  283
  293
  303
  314
  326
  338
  351
  364
  322
  337
  353
  370
  387
  406
  425
  446
  468
  490
  514
  539
  566
  594
  623
  654
  686
  720
  755
  793
Funds from operations, $m
  516
  573
  610
  650
  693
  740
  789
  843
  900
  960
  1,010
  1,079
  1,153
  1,231
  1,314
  1,402
  1,496
  1,595
  1,701
  1,812
  1,930
  2,055
  2,187
  2,326
  2,474
  2,630
  2,795
  2,969
  3,153
  3,347
Change in working capital, $m
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  30
  31
  33
  34
  36
  38
  40
  42
  44
  46
  49
Cash from operations, $m
  505
  562
  598
  637
  680
  725
  774
  827
  883
  943
  991
  1,060
  1,132
  1,209
  1,291
  1,378
  1,471
  1,569
  1,672
  1,782
  1,899
  2,022
  2,152
  2,290
  2,436
  2,590
  2,753
  2,925
  3,106
  3,298
Maintenance CAPEX, $m
  -201
  -209
  -218
  -227
  -236
  -247
  -258
  -269
  -281
  -294
  -308
  -322
  -337
  -353
  -370
  -387
  -406
  -425
  -446
  -468
  -490
  -514
  -539
  -566
  -594
  -623
  -654
  -686
  -720
  -755
New CAPEX, $m
  -86
  -92
  -98
  -104
  -110
  -116
  -123
  -130
  -137
  -145
  -153
  -161
  -170
  -179
  -189
  -199
  -209
  -220
  -231
  -243
  -256
  -269
  -283
  -297
  -313
  -328
  -345
  -363
  -381
  -400
Cash from investing activities, $m
  -287
  -301
  -316
  -331
  -346
  -363
  -381
  -399
  -418
  -439
  -461
  -483
  -507
  -532
  -559
  -586
  -615
  -645
  -677
  -711
  -746
  -783
  -822
  -863
  -907
  -951
  -999
  -1,049
  -1,101
  -1,155
Free cash flow, $m
  219
  261
  283
  307
  334
  362
  394
  428
  464
  504
  531
  576
  625
  677
  733
  792
  856
  923
  995
  1,071
  1,153
  1,239
  1,330
  1,427
  1,530
  1,639
  1,754
  1,876
  2,006
  2,142
Issuance/(repayment) of debt, $m
  -428
  172
  183
  194
  206
  218
  231
  244
  258
  272
  287
  303
  319
  336
  354
  373
  392
  413
  434
  457
  480
  505
  531
  558
  586
  616
  648
  680
  715
  751
Issuance/(repurchase) of shares, $m
  356
  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  
  -72
  172
  183
  194
  206
  218
  231
  244
  258
  272
  287
  303
  319
  336
  354
  373
  392
  413
  434
  457
  480
  505
  531
  558
  586
  616
  648
  680
  715
  751
Total cash flow (excl. dividends), $m
  147
  433
  466
  502
  540
  581
  625
  672
  722
  776
  818
  879
  944
  1,013
  1,087
  1,165
  1,248
  1,336
  1,429
  1,528
  1,633
  1,744
  1,861
  1,985
  2,116
  2,255
  2,402
  2,557
  2,720
  2,893
Retained Cash Flow (-), $m
  -606
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
  -79
  -83
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
  -460
  414
  446
  480
  517
  556
  599
  645
  693
  746
  786
  845
  909
  976
  1,048
  1,124
  1,204
  1,290
  1,381
  1,477
  1,579
  1,687
  1,802
  1,923
  2,051
  2,187
  2,330
  2,481
  2,641
  2,810
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
  -400
  310
  283
  255
  226
  197
  169
  142
  117
  94
  73
  56
  42
  31
  22
  15
  10
  7
  4
  3
  2
  1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Constellium N.V. is a Netherlands-based company engaged in developing aluminum products for a range of markets and applications, including aerospace, automotive and packaging. The Company's manufacturing facilities are located in the United States, Europe and China. It operates through three segments: Packaging & Automotive Rolled Product; Aerospace & Transportation, and Automotive Structures & Industry. Its products include can body stock, can end stock, auto body sheet, heat exchangers, specialty reflective sheet, aerospace plates and sheets, aerospace wingskins, plates for general engineering, sheets for transportation applications, soft alloys, hard alloys, large profiles and automotive structures. It offers services, such as pre-machining services, which includes surface machining, boring and drilling; aluminum recycling services to recycle aluminum from end-of-life aircraft, and advanced welding services.

FINANCIAL RATIOS  of  Constellium N.V. (CSTM)

Valuation Ratios
P/E Ratio -269.8
Price to Sales 0.2
Price to Book -1.8
Price to Tangible Book
Price to Cash Flow 11.6
Price to Free Cash Flow -3.8
Growth Rates
Sales Growth Rate -8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1.6%
Cap. Spend. - 3 Yr. Gr. Rate 19.8%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity -407.9%
Total Debt to Equity -426.4%
Interest Coverage 1
Management Effectiveness
Return On Assets -0.4%
Ret/ On Assets - 3 Yr. Avg. -3.3%
Return On Total Capital -0.2%
Ret/ On T. Cap. - 3 Yr. Avg. -10.7%
Return On Equity 0.7%
Return On Equity - 3 Yr. Avg. -264.8%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 10.9%
Gross Margin - 3 Yr. Avg. 10.9%
EBITDA Margin 8.3%
EBITDA Margin - 3 Yr. Avg. 2.5%
Operating Margin 5.2%
Oper. Margin - 3 Yr. Avg. 0.3%
Pre-Tax Margin 1.4%
Pre-Tax Margin - 3 Yr. Avg. -2.5%
Net Profit Margin -0.1%
Net Profit Margin - 3 Yr. Avg. -3.1%
Effective Tax Rate 105.8%
Eff/ Tax Rate - 3 Yr. Avg. 50.6%
Payout Ratio 0%

CSTM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CSTM stock intrinsic value calculation we used $6536 million for the last fiscal year's total revenue generated by Constellium N.V.. The default revenue input number comes from 0001 income statement of Constellium N.V.. 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 CSTM stock valuation model: a) initial revenue growth rate of 4% 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 CSTM is calculated based on our internal credit rating of Constellium N.V., 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 Constellium N.V..
    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 CSTM stock the variable cost ratio is equal to 76.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1107 million in the base year in the intrinsic value calculation for CSTM 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 Constellium N.V..

Corporate tax rate of 27% is the nominal tax rate for Constellium N.V.. 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 CSTM 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 CSTM are equal to 32.9%.

Life of production assets of 10.7 years is the average useful life of capital assets used in Constellium N.V. 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 CSTM is equal to 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 - $-140.229885058 million for Constellium N.V. - 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 135.912 million for Constellium N.V. 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 Constellium N.V. at the current share price and the inputted number of shares is $1.4 billion.

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