Intrinsic value of Energizer Holdings, Inc. - ENR

Previous Close

$40.64

  Intrinsic Value

$23.14

stock screener

  Rating & Target

sell

-43%

Previous close

$40.64

 
Intrinsic value

$23.14

 
Up/down potential

-43%

 
Rating

sell

We calculate the intrinsic value of ENR 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 2.8

 

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
  1,834
  1,876
  1,924
  1,978
  2,038
  2,104
  2,176
  2,254
  2,337
  2,427
  2,523
  2,625
  2,734
  2,850
  2,973
  3,103
  3,241
  3,387
  3,541
  3,704
  3,875
  4,057
  4,247
  4,448
  4,660
  4,883
  5,118
  5,365
  5,625
  5,898
Variable operating expenses, $m
  1,510
  1,544
  1,582
  1,625
  1,673
  1,726
  1,783
  1,845
  1,911
  1,983
  2,012
  2,093
  2,180
  2,273
  2,371
  2,475
  2,585
  2,701
  2,824
  2,954
  3,091
  3,235
  3,387
  3,547
  3,716
  3,894
  4,081
  4,278
  4,485
  4,703
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
  1,510
  1,544
  1,582
  1,625
  1,673
  1,726
  1,783
  1,845
  1,911
  1,983
  2,012
  2,093
  2,180
  2,273
  2,371
  2,475
  2,585
  2,701
  2,824
  2,954
  3,091
  3,235
  3,387
  3,547
  3,716
  3,894
  4,081
  4,278
  4,485
  4,703
Operating income, $m
  324
  332
  342
  353
  365
  378
  393
  409
  426
  444
  511
  532
  554
  577
  602
  628
  656
  686
  717
  750
  785
  822
  860
  901
  944
  989
  1,037
  1,087
  1,139
  1,195
EBITDA, $m
  401
  410
  420
  432
  445
  460
  475
  492
  511
  530
  551
  574
  597
  623
  650
  678
  708
  740
  774
  809
  847
  886
  928
  972
  1,018
  1,067
  1,118
  1,172
  1,229
  1,289
Interest expense (income), $m
  51
  138
  73
  76
  78
  81
  84
  88
  92
  96
  100
  105
  110
  116
  122
  128
  134
  141
  149
  156
  165
  173
  183
  192
  203
  213
  225
  237
  249
  262
  276
Earnings before tax, $m
  186
  259
  266
  275
  284
  294
  305
  317
  330
  344
  406
  421
  438
  456
  474
  494
  515
  537
  561
  585
  611
  639
  668
  698
  730
  764
  800
  837
  877
  918
Tax expense, $m
  50
  70
  72
  74
  77
  79
  82
  86
  89
  93
  110
  114
  118
  123
  128
  133
  139
  145
  151
  158
  165
  173
  180
  189
  197
  206
  216
  226
  237
  248
Net income, $m
  136
  189
  195
  201
  207
  215
  223
  231
  241
  251
  296
  308
  320
  333
  346
  361
  376
  392
  409
  427
  446
  466
  488
  510
  533
  558
  584
  611
  640
  670

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
  1,949
  1,994
  2,045
  2,103
  2,166
  2,236
  2,312
  2,395
  2,484
  2,579
  2,681
  2,790
  2,906
  3,029
  3,159
  3,298
  3,444
  3,599
  3,763
  3,936
  4,118
  4,311
  4,514
  4,727
  4,952
  5,189
  5,439
  5,701
  5,977
  6,268
Adjusted assets (=assets-cash), $m
  1,949
  1,994
  2,045
  2,103
  2,166
  2,236
  2,312
  2,395
  2,484
  2,579
  2,681
  2,790
  2,906
  3,029
  3,159
  3,298
  3,444
  3,599
  3,763
  3,936
  4,118
  4,311
  4,514
  4,727
  4,952
  5,189
  5,439
  5,701
  5,977
  6,268
Revenue / Adjusted assets
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
Average production assets, $m
  413
  422
  433
  445
  459
  473
  490
  507
  526
  546
  568
  591
  615
  641
  669
  698
  729
  762
  797
  833
  872
  913
  956
  1,001
  1,049
  1,099
  1,152
  1,207
  1,266
  1,327
Working capital, $m
  -1,119
  -1,144
  -1,174
  -1,207
  -1,243
  -1,284
  -1,327
  -1,375
  -1,426
  -1,480
  -1,539
  -1,601
  -1,668
  -1,739
  -1,813
  -1,893
  -1,977
  -2,066
  -2,160
  -2,259
  -2,364
  -2,474
  -2,591
  -2,714
  -2,843
  -2,979
  -3,122
  -3,273
  -3,431
  -3,598
Total debt, $m
  1,309
  1,349
  1,396
  1,447
  1,505
  1,568
  1,636
  1,710
  1,790
  1,876
  1,968
  2,066
  2,170
  2,281
  2,399
  2,523
  2,655
  2,795
  2,942
  3,098
  3,262
  3,435
  3,617
  3,810
  4,012
  4,226
  4,450
  4,686
  4,935
  5,196
Total liabilities, $m
  1,754
  1,794
  1,841
  1,892
  1,950
  2,013
  2,081
  2,155
  2,235
  2,321
  2,413
  2,511
  2,615
  2,726
  2,843
  2,968
  3,100
  3,239
  3,387
  3,542
  3,707
  3,880
  4,062
  4,255
  4,457
  4,670
  4,895
  5,131
  5,380
  5,641
Total equity, $m
  195
  199
  205
  210
  217
  224
  231
  239
  248
  258
  268
  279
  291
  303
  316
  330
  344
  360
  376
  394
  412
  431
  451
  473
  495
  519
  544
  570
  598
  627
Total liabilities and equity, $m
  1,949
  1,993
  2,046
  2,102
  2,167
  2,237
  2,312
  2,394
  2,483
  2,579
  2,681
  2,790
  2,906
  3,029
  3,159
  3,298
  3,444
  3,599
  3,763
  3,936
  4,119
  4,311
  4,513
  4,728
  4,952
  5,189
  5,439
  5,701
  5,978
  6,268
Debt-to-equity ratio
  6.720
  6.770
  6.820
  6.880
  6.950
  7.010
  7.080
  7.140
  7.210
  7.270
  7.340
  7.410
  7.470
  7.530
  7.590
  7.650
  7.710
  7.760
  7.820
  7.870
  7.920
  7.970
  8.010
  8.060
  8.100
  8.140
  8.180
  8.220
  8.260
  8.290
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
  136
  189
  195
  201
  207
  215
  223
  231
  241
  251
  296
  308
  320
  333
  346
  361
  376
  392
  409
  427
  446
  466
  488
  510
  533
  558
  584
  611
  640
  670
Depreciation, amort., depletion, $m
  77
  78
  78
  79
  80
  81
  82
  84
  85
  86
  40
  42
  44
  45
  47
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
  78
  82
  86
  90
  94
Funds from operations, $m
  213
  267
  273
  280
  288
  296
  305
  315
  326
  337
  337
  350
  363
  378
  394
  410
  428
  446
  466
  486
  508
  531
  555
  581
  608
  636
  666
  697
  730
  764
Change in working capital, $m
  -22
  -26
  -29
  -33
  -37
  -40
  -44
  -47
  -51
  -55
  -59
  -62
  -66
  -71
  -75
  -79
  -84
  -89
  -94
  -99
  -105
  -110
  -116
  -123
  -129
  -136
  -143
  -151
  -158
  -167
Cash from operations, $m
  235
  292
  302
  313
  324
  336
  349
  362
  377
  392
  395
  412
  430
  449
  469
  490
  512
  535
  560
  586
  613
  642
  672
  703
  737
  772
  809
  848
  888
  931
Maintenance CAPEX, $m
  -29
  -29
  -30
  -31
  -32
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
  -78
  -82
  -86
  -90
New CAPEX, $m
  -8
  -9
  -11
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -58
  -61
Cash from investing activities, $m
  -37
  -38
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -57
  -61
  -63
  -67
  -70
  -73
  -76
  -81
  -85
  -89
  -94
  -98
  -103
  -108
  -113
  -119
  -124
  -131
  -138
  -144
  -151
Free cash flow, $m
  198
  254
  262
  270
  279
  289
  299
  310
  322
  334
  335
  349
  363
  379
  396
  413
  431
  451
  471
  493
  515
  539
  564
  590
  618
  647
  678
  710
  744
  780
Issuance/(repayment) of debt, $m
  -1,149
  40
  46
  52
  57
  63
  69
  74
  80
  86
  92
  98
  104
  111
  118
  125
  132
  139
  147
  156
  164
  173
  183
  192
  203
  213
  224
  236
  248
  261
Issuance/(repurchase) of shares, $m
  1,052
  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  
  -97
  40
  46
  52
  57
  63
  69
  74
  80
  86
  92
  98
  104
  111
  118
  125
  132
  139
  147
  156
  164
  173
  183
  192
  203
  213
  224
  236
  248
  261
Total cash flow (excl. dividends), $m
  101
  294
  308
  322
  337
  352
  368
  384
  402
  420
  427
  447
  468
  490
  513
  538
  563
  590
  618
  648
  679
  712
  747
  783
  821
  861
  902
  946
  993
  1,041
Retained Cash Flow (-), $m
  -1,187
  -4
  -5
  -6
  -6
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
Prev. year cash balance distribution, $m
  1,017
  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
  -70
  290
  303
  316
  330
  345
  360
  376
  393
  411
  416
  436
  456
  478
  500
  524
  549
  575
  602
  631
  661
  693
  726
  761
  798
  837
  878
  920
  965
  1,012
Discount rate, %
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
  -66
  260
  255
  249
  242
  233
  223
  212
  199
  186
  167
  154
  140
  126
  112
  98
  85
  73
  62
  51
  42
  33
  26
  20
  15
  11
  8
  6
  4
  3
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

Energizer Holdings, Inc. is a manufacturer, marketer and distributor of household batteries, specialty batteries and lighting products. The Company is a designer and marketer of automotive fragrance and appearance products. It operates through four geographic segments: North America, which consists of the United States and Canada; Latin America, which includes its markets in Mexico, the Caribbean, Central America and South America; Europe, the Middle East and Africa (EMEA), and Asia Pacific, which consists of its markets in Asia, Australia and New Zealand. The Company offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. These products are sold under the Energizer and Eveready brands in the performance, premium and price segments and include primary, rechargeable, specialty and hearing aid products. It manufactures, distributes and markets lighting products, including headlights, lanterns, kid's lights and area lights.

FINANCIAL RATIOS  of  Energizer Holdings, Inc. (ENR)

Valuation Ratios
P/E Ratio 12.2
Price to Sales 1.4
Price to Book 29
Price to Tangible Book
Price to Cash Flow 12.5
Price to Free Cash Flow 14.3
Growth Rates
Sales Growth Rate 7.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -13.8%
Cap. Spend. - 3 Yr. Gr. Rate -2.2%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 1151.8%
Total Debt to Equity 1278.8%
Interest Coverage 6
Management Effectiveness
Return On Assets 13.5%
Ret/ On Assets - 3 Yr. Avg. 14.6%
Return On Total Capital 18.5%
Ret/ On T. Cap. - 3 Yr. Avg. 10.4%
Return On Equity 734.5%
Return On Equity - 3 Yr. Avg. 149.6%
Asset Turnover 1
Profitability Ratios
Gross Margin 46.2%
Gross Margin - 3 Yr. Avg. 45.4%
EBITDA Margin 21.3%
EBITDA Margin - 3 Yr. Avg. 14.5%
Operating Margin 15.8%
Oper. Margin - 3 Yr. Avg. 8.2%
Pre-Tax Margin 15.5%
Pre-Tax Margin - 3 Yr. Avg. 8.5%
Net Profit Margin 11.5%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 26%
Eff/ Tax Rate - 3 Yr. Avg. -83.7%
Payout Ratio 34.2%

ENR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENR stock intrinsic value calculation we used $1798 million for the last fiscal year's total revenue generated by Energizer Holdings, Inc.. The default revenue input number comes from 0001 income statement of Energizer Holdings, 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 ENR 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 5.3%, whose default value for ENR is calculated based on our internal credit rating of Energizer Holdings, 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 Energizer Holdings, 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 ENR stock the variable cost ratio is equal to 82.4%.

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 ENR 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 5.6% for Energizer Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for Energizer Holdings, 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 ENR 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 ENR are equal to 22.5%.

Life of production assets of 14.1 years is the average useful life of capital assets used in Energizer Holdings, 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 ENR is equal to -61%. 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 - $24.5 million for Energizer Holdings, 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 69.903 million for Energizer Holdings, 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 Energizer Holdings, Inc. at the current share price and the inputted number of shares is $2.8 billion.

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