Intrinsic value of Energizer Holdings, Inc. - EPC

Previous Close

$30.61

  Intrinsic Value

$26.54

stock screener

  Rating & Target

hold

-13%

Previous close

$30.61

 
Intrinsic value

$26.54

 
Up/down potential

-13%

 
Rating

hold

We calculate the intrinsic value of EPC 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 1.7

 

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
  2,279
  2,331
  2,391
  2,458
  2,533
  2,615
  2,704
  2,800
  2,904
  3,015
  3,134
  3,262
  3,397
  3,541
  3,694
  3,856
  4,027
  4,208
  4,400
  4,602
  4,815
  5,040
  5,277
  5,527
  5,790
  6,067
  6,359
  6,666
  6,989
  7,328
Variable operating expenses, $m
  2,258
  2,304
  2,356
  2,415
  2,481
  2,553
  2,631
  2,716
  2,807
  2,905
  2,755
  2,867
  2,986
  3,112
  3,246
  3,389
  3,539
  3,698
  3,867
  4,044
  4,232
  4,430
  4,638
  4,858
  5,089
  5,332
  5,589
  5,858
  6,142
  6,440
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
  2,258
  2,304
  2,356
  2,415
  2,481
  2,553
  2,631
  2,716
  2,807
  2,905
  2,755
  2,867
  2,986
  3,112
  3,246
  3,389
  3,539
  3,698
  3,867
  4,044
  4,232
  4,430
  4,638
  4,858
  5,089
  5,332
  5,589
  5,858
  6,142
  6,440
Operating income, $m
  21
  27
  35
  43
  52
  62
  73
  84
  97
  110
  380
  395
  412
  429
  447
  467
  488
  510
  533
  557
  583
  611
  639
  670
  701
  735
  770
  808
  847
  888
EBITDA, $m
  334
  342
  350
  360
  371
  383
  396
  410
  426
  442
  459
  478
  498
  519
  541
  565
  590
  617
  645
  675
  706
  739
  774
  810
  849
  889
  932
  977
  1,024
  1,074
Interest expense (income), $m
  66
  70
  73
  75
  79
  82
  86
  90
  95
  100
  106
  112
  118
  125
  132
  140
  148
  157
  166
  176
  186
  197
  208
  220
  233
  246
  260
  275
  290
  307
  324
Earnings before tax, $m
  -49
  -45
  -41
  -36
  -30
  -24
  -18
  -11
  -4
  4
  268
  277
  287
  297
  308
  319
  331
  344
  357
  372
  387
  403
  419
  437
  455
  475
  495
  517
  540
  564
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  72
  75
  77
  80
  83
  86
  89
  93
  97
  100
  104
  109
  113
  118
  123
  128
  134
  140
  146
  152
Net income, $m
  -49
  -45
  -41
  -36
  -30
  -24
  -18
  -11
  -4
  3
  196
  202
  209
  217
  225
  233
  242
  251
  261
  271
  282
  294
  306
  319
  332
  347
  362
  377
  394
  411

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
  4,033
  4,126
  4,232
  4,351
  4,483
  4,628
  4,785
  4,956
  5,140
  5,337
  5,548
  5,773
  6,013
  6,267
  6,538
  6,824
  7,128
  7,448
  7,787
  8,145
  8,523
  8,921
  9,340
  9,783
  10,248
  10,739
  11,255
  11,798
  12,369
  12,970
Adjusted assets (=assets-cash), $m
  4,033
  4,126
  4,232
  4,351
  4,483
  4,628
  4,785
  4,956
  5,140
  5,337
  5,548
  5,773
  6,013
  6,267
  6,538
  6,824
  7,128
  7,448
  7,787
  8,145
  8,523
  8,921
  9,340
  9,783
  10,248
  10,739
  11,255
  11,798
  12,369
  12,970
Revenue / Adjusted assets
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
  0.565
Average production assets, $m
  1,739
  1,779
  1,824
  1,876
  1,933
  1,995
  2,063
  2,136
  2,216
  2,301
  2,392
  2,489
  2,592
  2,702
  2,818
  2,942
  3,073
  3,211
  3,357
  3,511
  3,674
  3,846
  4,027
  4,217
  4,418
  4,629
  4,852
  5,086
  5,332
  5,591
Working capital, $m
  164
  168
  172
  177
  182
  188
  195
  202
  209
  217
  226
  235
  245
  255
  266
  278
  290
  303
  317
  331
  347
  363
  380
  398
  417
  437
  458
  480
  503
  528
Total debt, $m
  1,343
  1,395
  1,454
  1,520
  1,594
  1,675
  1,763
  1,858
  1,961
  2,071
  2,189
  2,315
  2,449
  2,592
  2,743
  2,903
  3,073
  3,252
  3,441
  3,641
  3,852
  4,075
  4,309
  4,557
  4,817
  5,091
  5,380
  5,683
  6,003
  6,339
Total liabilities, $m
  2,254
  2,306
  2,366
  2,432
  2,506
  2,587
  2,675
  2,770
  2,873
  2,983
  3,101
  3,227
  3,361
  3,504
  3,655
  3,815
  3,984
  4,164
  4,353
  4,553
  4,764
  4,987
  5,221
  5,468
  5,729
  6,003
  6,291
  6,595
  6,914
  7,250
Total equity, $m
  1,779
  1,819
  1,866
  1,919
  1,977
  2,041
  2,110
  2,185
  2,267
  2,354
  2,447
  2,546
  2,652
  2,764
  2,883
  3,010
  3,143
  3,285
  3,434
  3,592
  3,758
  3,934
  4,119
  4,314
  4,519
  4,736
  4,963
  5,203
  5,455
  5,720
Total liabilities and equity, $m
  4,033
  4,125
  4,232
  4,351
  4,483
  4,628
  4,785
  4,955
  5,140
  5,337
  5,548
  5,773
  6,013
  6,268
  6,538
  6,825
  7,127
  7,449
  7,787
  8,145
  8,522
  8,921
  9,340
  9,782
  10,248
  10,739
  11,254
  11,798
  12,369
  12,970
Debt-to-equity ratio
  0.750
  0.770
  0.780
  0.790
  0.810
  0.820
  0.840
  0.850
  0.870
  0.880
  0.890
  0.910
  0.920
  0.940
  0.950
  0.960
  0.980
  0.990
  1.000
  1.010
  1.020
  1.040
  1.050
  1.060
  1.070
  1.080
  1.080
  1.090
  1.100
  1.110
Adjusted equity ratio
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -49
  -45
  -41
  -36
  -30
  -24
  -18
  -11
  -4
  3
  196
  202
  209
  217
  225
  233
  242
  251
  261
  271
  282
  294
  306
  319
  332
  347
  362
  377
  394
  411
Depreciation, amort., depletion, $m
  313
  314
  316
  318
  319
  321
  324
  326
  329
  332
  80
  83
  86
  90
  94
  98
  102
  107
  112
  117
  122
  128
  134
  141
  147
  154
  162
  170
  178
  186
Funds from operations, $m
  264
  269
  275
  282
  289
  297
  306
  315
  325
  335
  275
  285
  296
  307
  318
  331
  344
  358
  373
  388
  405
  422
  440
  459
  480
  501
  523
  547
  572
  598
Change in working capital, $m
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
Cash from operations, $m
  261
  265
  271
  277
  284
  291
  299
  308
  318
  327
  267
  276
  286
  296
  307
  319
  332
  345
  359
  374
  389
  406
  423
  442
  461
  481
  502
  525
  549
  573
Maintenance CAPEX, $m
  -57
  -58
  -59
  -61
  -63
  -64
  -66
  -69
  -71
  -74
  -77
  -80
  -83
  -86
  -90
  -94
  -98
  -102
  -107
  -112
  -117
  -122
  -128
  -134
  -141
  -147
  -154
  -162
  -170
  -178
New CAPEX, $m
  -33
  -40
  -46
  -51
  -57
  -62
  -68
  -74
  -79
  -85
  -91
  -97
  -103
  -110
  -117
  -124
  -131
  -138
  -146
  -154
  -163
  -172
  -181
  -191
  -201
  -211
  -222
  -234
  -246
  -259
Cash from investing activities, $m
  -90
  -98
  -105
  -112
  -120
  -126
  -134
  -143
  -150
  -159
  -168
  -177
  -186
  -196
  -207
  -218
  -229
  -240
  -253
  -266
  -280
  -294
  -309
  -325
  -342
  -358
  -376
  -396
  -416
  -437
Free cash flow, $m
  171
  167
  166
  165
  164
  164
  165
  166
  167
  168
  99
  99
  100
  100
  101
  102
  103
  104
  106
  108
  110
  112
  114
  117
  119
  122
  126
  129
  133
  137
Issuance/(repayment) of debt, $m
  46
  52
  59
  67
  74
  81
  88
  95
  103
  110
  118
  126
  134
  142
  151
  160
  170
  179
  189
  200
  211
  223
  235
  247
  260
  274
  289
  304
  319
  336
Issuance/(repurchase) of shares, $m
  83
  86
  87
  88
  88
  88
  87
  86
  85
  84
  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  
  129
  138
  146
  155
  162
  169
  175
  181
  188
  194
  118
  126
  134
  142
  151
  160
  170
  179
  189
  200
  211
  223
  235
  247
  260
  274
  289
  304
  319
  336
Total cash flow (excl. dividends), $m
  300
  305
  313
  320
  327
  334
  341
  348
  355
  362
  217
  225
  234
  242
  252
  262
  273
  284
  295
  308
  321
  334
  349
  364
  380
  396
  414
  433
  452
  473
Retained Cash Flow (-), $m
  -83
  -86
  -87
  -88
  -88
  -88
  -87
  -86
  -85
  -87
  -93
  -99
  -106
  -112
  -119
  -126
  -134
  -141
  -149
  -158
  -166
  -176
  -185
  -195
  -205
  -216
  -228
  -240
  -252
  -265
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
  217
  219
  225
  231
  238
  245
  253
  261
  270
  275
  124
  126
  128
  130
  133
  136
  139
  142
  146
  150
  154
  159
  164
  169
  174
  180
  186
  193
  200
  207
Discount rate, %
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
  204
  194
  185
  176
  167
  156
  146
  135
  124
  111
  44
  38
  33
  28
  24
  20
  17
  13
  11
  9
  7
  5
  4
  3
  2
  1
  1
  1
  0
  0
Current shareholders' claim on cash, %
  95.2
  90.6
  86.3
  82.2
  78.4
  74.9
  71.6
  68.7
  66.0
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5
  63.5

Edgewell Personal Care Company is a manufacturer and marketer of personal care products in the wet shave, sun and skin care, feminine care and infant care categories. As of September 30, 2016, the Company had a portfolio of over 25 brands. It manages its business in four segments: Wet Shave, Sun and Skin Care, Feminine Care and All Other. Its Wet shave products are sold under the Schick, Wilkinson Sword, Edge, Skintimate, Shave Guard and Personna brand names. Its Sun and Skin Care products are sold under the Banana Boat, Hawaiian Tropic, Wet Ones and Playtex brand names and offers Wet Ones, portable hand wipes category, and Playtex household gloves, the branded household glove in the United States. Its Feminine Care segment markets its products under the Playtex, Stayfree, Carefree and o.b. brands and markets pads and liners. Its All Other segment includes infant care, pet care and miscellaneous other products.

FINANCIAL RATIOS  of  Energizer Holdings, Inc. (EPC)

Valuation Ratios
P/E Ratio 285.8
Price to Sales 0.7
Price to Book 1
Price to Tangible Book
Price to Cash Flow 5.8
Price to Free Cash Flow 7.6
Growth Rates
Sales Growth Rate -2.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1.4%
Cap. Spend. - 3 Yr. Gr. Rate -4.1%
Financial Strength
Quick Ratio 26
Current Ratio 0.1
LT Debt to Equity 87.6%
Total Debt to Equity 88.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -0%
Ret/ On Assets - 3 Yr. Avg. 0.7%
Return On Total Capital 0.2%
Ret/ On T. Cap. - 3 Yr. Avg. -0.5%
Return On Equity 0.3%
Return On Equity - 3 Yr. Avg. -0.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 49.2%
Gross Margin - 3 Yr. Avg. 49.1%
EBITDA Margin 4.7%
EBITDA Margin - 3 Yr. Avg. 4.5%
Operating Margin -2.3%
Oper. Margin - 3 Yr. Avg. -4%
Pre-Tax Margin -2.3%
Pre-Tax Margin - 3 Yr. Avg. -4%
Net Profit Margin 0.3%
Net Profit Margin - 3 Yr. Avg. -1.2%
Effective Tax Rate 111.3%
Eff/ Tax Rate - 3 Yr. Avg. 55.2%
Payout Ratio 0%

EPC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EPC stock intrinsic value calculation we used $2234 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 EPC 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 6.1%, whose default value for EPC 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 EPC stock the variable cost ratio is equal to 99.3%.

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 EPC 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 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 EPC 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 EPC are equal to 76.3%.

Life of production assets of 30.5 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 EPC is equal to 7.2%. 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 - $1744.6 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 54.184 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 $1.7 billion.

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