Intrinsic value of Ferrellgas Partners, L.P. - FGP

Previous Close

$0.73

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.73

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of FGP 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 0.1

 

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
  2,114
  2,163
  2,219
  2,281
  2,350
  2,426
  2,509
  2,598
  2,695
  2,798
  2,909
  3,027
  3,152
  3,286
  3,428
  3,578
  3,737
  3,905
  4,083
  4,270
  4,468
  4,677
  4,897
  5,129
  5,373
  5,630
  5,901
  6,185
  6,485
  6,800
Variable operating expenses, $m
  2,010
  2,056
  2,107
  2,166
  2,230
  2,301
  2,378
  2,462
  2,552
  2,648
  2,715
  2,825
  2,942
  3,067
  3,199
  3,339
  3,488
  3,645
  3,810
  3,985
  4,170
  4,365
  4,570
  4,787
  5,015
  5,255
  5,507
  5,773
  6,052
  6,346
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
  2,010
  2,056
  2,107
  2,166
  2,230
  2,301
  2,378
  2,462
  2,552
  2,648
  2,715
  2,825
  2,942
  3,067
  3,199
  3,339
  3,488
  3,645
  3,810
  3,985
  4,170
  4,365
  4,570
  4,787
  5,015
  5,255
  5,507
  5,773
  6,052
  6,346
Operating income, $m
  104
  108
  111
  115
  120
  125
  131
  137
  143
  150
  194
  202
  210
  219
  229
  239
  249
  260
  272
  285
  298
  312
  327
  342
  358
  376
  394
  413
  433
  454
EBITDA, $m
  224
  229
  235
  242
  249
  257
  266
  275
  285
  296
  308
  321
  334
  348
  363
  379
  396
  414
  433
  452
  473
  496
  519
  543
  569
  596
  625
  655
  687
  720
Interest expense (income), $m
  143
  169
  160
  163
  165
  168
  171
  175
  179
  183
  187
  192
  197
  203
  208
  215
  221
  228
  235
  243
  251
  260
  269
  279
  289
  300
  311
  323
  335
  348
  362
Earnings before tax, $m
  -65
  -53
  -51
  -50
  -48
  -46
  -44
  -42
  -40
  -37
  2
  5
  8
  11
  14
  18
  21
  25
  29
  34
  38
  43
  48
  53
  59
  65
  71
  77
  84
  91
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  3
  4
  5
  6
  7
  8
  9
  10
  12
  13
  14
  16
  17
  19
  21
  23
  25
Net income, $m
  -65
  -53
  -51
  -50
  -48
  -46
  -44
  -42
  -40
  -37
  1
  3
  6
  8
  10
  13
  16
  18
  21
  24
  28
  31
  35
  39
  43
  47
  52
  56
  61
  67

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
  1,390
  1,422
  1,459
  1,500
  1,545
  1,595
  1,649
  1,708
  1,772
  1,840
  1,912
  1,990
  2,073
  2,160
  2,254
  2,352
  2,457
  2,567
  2,684
  2,808
  2,938
  3,075
  3,220
  3,372
  3,533
  3,702
  3,879
  4,067
  4,264
  4,471
Adjusted assets (=assets-cash), $m
  1,390
  1,422
  1,459
  1,500
  1,545
  1,595
  1,649
  1,708
  1,772
  1,840
  1,912
  1,990
  2,073
  2,160
  2,254
  2,352
  2,457
  2,567
  2,684
  2,808
  2,938
  3,075
  3,220
  3,372
  3,533
  3,702
  3,879
  4,067
  4,264
  4,471
Revenue / Adjusted assets
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.522
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
  1.521
Average production assets, $m
  880
  900
  923
  949
  978
  1,009
  1,044
  1,081
  1,121
  1,164
  1,210
  1,259
  1,311
  1,367
  1,426
  1,488
  1,555
  1,624
  1,698
  1,776
  1,859
  1,946
  2,037
  2,134
  2,235
  2,342
  2,455
  2,573
  2,698
  2,829
Working capital, $m
  57
  58
  60
  62
  63
  66
  68
  70
  73
  76
  79
  82
  85
  89
  93
  97
  101
  105
  110
  115
  121
  126
  132
  138
  145
  152
  159
  167
  175
  184
Total debt, $m
  2,057
  2,086
  2,119
  2,156
  2,197
  2,242
  2,291
  2,344
  2,401
  2,462
  2,527
  2,597
  2,671
  2,750
  2,834
  2,923
  3,017
  3,117
  3,222
  3,333
  3,450
  3,574
  3,704
  3,841
  3,985
  4,138
  4,298
  4,466
  4,643
  4,830
Total liabilities, $m
  1,251
  1,280
  1,313
  1,350
  1,391
  1,436
  1,484
  1,537
  1,594
  1,656
  1,721
  1,791
  1,865
  1,944
  2,028
  2,117
  2,211
  2,311
  2,416
  2,527
  2,644
  2,767
  2,898
  3,035
  3,179
  3,331
  3,492
  3,660
  3,837
  4,024
Total equity, $m
  139
  142
  146
  150
  155
  160
  165
  171
  177
  184
  191
  199
  207
  216
  225
  235
  246
  257
  268
  281
  294
  307
  322
  337
  353
  370
  388
  407
  426
  447
Total liabilities and equity, $m
  1,390
  1,422
  1,459
  1,500
  1,546
  1,596
  1,649
  1,708
  1,771
  1,840
  1,912
  1,990
  2,072
  2,160
  2,253
  2,352
  2,457
  2,568
  2,684
  2,808
  2,938
  3,074
  3,220
  3,372
  3,532
  3,701
  3,880
  4,067
  4,263
  4,471
Debt-to-equity ratio
  14.800
  14.670
  14.530
  14.380
  14.220
  14.050
  13.890
  13.720
  13.550
  13.380
  13.220
  13.050
  12.890
  12.730
  12.580
  12.430
  12.280
  12.140
  12.000
  11.870
  11.740
  11.620
  11.500
  11.390
  11.280
  11.180
  11.080
  10.980
  10.890
  10.800
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
  -65
  -53
  -51
  -50
  -48
  -46
  -44
  -42
  -40
  -37
  1
  3
  6
  8
  10
  13
  16
  18
  21
  24
  28
  31
  35
  39
  43
  47
  52
  56
  61
  67
Depreciation, amort., depletion, $m
  120
  122
  124
  126
  129
  132
  135
  139
  142
  147
  114
  119
  124
  129
  135
  140
  147
  153
  160
  168
  175
  184
  192
  201
  211
  221
  232
  243
  255
  267
Funds from operations, $m
  55
  69
  72
  76
  81
  86
  91
  97
  103
  109
  116
  122
  129
  137
  145
  153
  162
  172
  182
  192
  203
  215
  227
  240
  254
  268
  283
  299
  316
  334
Change in working capital, $m
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
Cash from operations, $m
  54
  67
  71
  75
  79
  84
  89
  94
  100
  106
  113
  119
  126
  133
  141
  149
  158
  167
  177
  187
  198
  209
  221
  234
  247
  261
  276
  292
  308
  325
Maintenance CAPEX, $m
  -81
  -83
  -85
  -87
  -90
  -92
  -95
  -98
  -102
  -106
  -110
  -114
  -119
  -124
  -129
  -135
  -140
  -147
  -153
  -160
  -168
  -175
  -184
  -192
  -201
  -211
  -221
  -232
  -243
  -255
New CAPEX, $m
  -16
  -20
  -23
  -26
  -29
  -32
  -34
  -37
  -40
  -43
  -46
  -49
  -52
  -56
  -59
  -62
  -66
  -70
  -74
  -78
  -82
  -87
  -92
  -96
  -102
  -107
  -113
  -118
  -125
  -131
Cash from investing activities, $m
  -97
  -103
  -108
  -113
  -119
  -124
  -129
  -135
  -142
  -149
  -156
  -163
  -171
  -180
  -188
  -197
  -206
  -217
  -227
  -238
  -250
  -262
  -276
  -288
  -303
  -318
  -334
  -350
  -368
  -386
Free cash flow, $m
  -44
  -36
  -37
  -38
  -39
  -40
  -41
  -41
  -42
  -42
  -43
  -44
  -45
  -46
  -47
  -48
  -49
  -50
  -50
  -51
  -52
  -53
  -54
  -55
  -56
  -57
  -58
  -58
  -59
  -60
Issuance/(repayment) of debt, $m
  -112
  29
  33
  37
  41
  45
  49
  53
  57
  61
  65
  70
  74
  79
  84
  89
  94
  99
  105
  111
  117
  124
  130
  137
  144
  152
  160
  168
  177
  186
Issuance/(repurchase) of shares, $m
  204
  56
  55
  54
  53
  51
  50
  48
  46
  44
  6
  4
  3
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  92
  85
  88
  91
  94
  96
  99
  101
  103
  105
  71
  74
  77
  80
  84
  89
  94
  99
  105
  111
  117
  124
  130
  137
  144
  152
  160
  168
  177
  186
Total cash flow (excl. dividends), $m
  48
  49
  51
  53
  54
  56
  58
  59
  61
  63
  28
  30
  32
  34
  37
  41
  45
  50
  55
  60
  65
  71
  76
  82
  89
  96
  103
  110
  118
  126
Retained Cash Flow (-), $m
  -204
  -56
  -55
  -54
  -53
  -51
  -50
  -48
  -46
  -44
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
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
  -7
  -4
  -1
  2
  5
  8
  11
  15
  19
  21
  22
  24
  25
  28
  31
  35
  39
  43
  47
  52
  57
  62
  67
  73
  79
  85
  91
  98
  105
Discount rate, %
  14.50
  15.23
  15.99
  16.79
  17.62
  18.51
  19.43
  20.40
  21.42
  22.49
  23.62
  24.80
  26.04
  27.34
  28.71
  30.14
  31.65
  33.23
  34.90
  36.64
  38.47
  40.40
  42.42
  44.54
  46.76
  49.10
  51.56
  54.14
  56.84
  59.68
PV of cash for distribution, $m
  -136
  -5
  -3
  -1
  1
  2
  2
  3
  3
  2
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  35.6
  25.7
  18.8
  13.9
  10.4
  7.9
  6.2
  4.9
  3.9
  3.8
  3.7
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6
  3.6

Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company's segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company's two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.

FINANCIAL RATIOS  of  Ferrellgas Partners, L.P. (FGP)

Valuation Ratios
P/E Ratio -1.3
Price to Sales 0
Price to Book -0.1
Price to Tangible Book
Price to Cash Flow 0.6
Price to Free Cash Flow 0.9
Growth Rates
Sales Growth Rate -5.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -57.6%
Cap. Spend. - 3 Yr. Gr. Rate -1.2%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity -264.7%
Total Debt to Equity -281.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 5.3%
Ret/ On Assets - 3 Yr. Avg. -5.1%
Return On Total Capital -3.8%
Ret/ On T. Cap. - 3 Yr. Avg. -13.1%
Return On Equity 7.7%
Return On Equity - 3 Yr. Avg. 124.4%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 38.3%
Gross Margin - 3 Yr. Avg. 40.3%
EBITDA Margin 9.8%
EBITDA Margin - 3 Yr. Avg. 0.3%
Operating Margin 4.9%
Oper. Margin - 3 Yr. Avg. -5%
Pre-Tax Margin -2.9%
Pre-Tax Margin - 3 Yr. Avg. -11.5%
Net Profit Margin -2.8%
Net Profit Margin - 3 Yr. Avg. -11.3%
Effective Tax Rate 1.8%
Eff/ Tax Rate - 3 Yr. Avg. 0.6%
Payout Ratio -148.1%

FGP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FGP stock intrinsic value calculation we used $2073 million for the last fiscal year's total revenue generated by Ferrellgas Partners, L.P.. The default revenue input number comes from 0001 income statement of Ferrellgas 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 FGP 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 14.5%, whose default value for FGP is calculated based on our internal credit rating of Ferrellgas 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 Ferrellgas 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 FGP stock the variable cost ratio is equal to 95.1%.

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 FGP 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 7.8% for Ferrellgas Partners, L.P..

Corporate tax rate of 27% is the nominal tax rate for Ferrellgas 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 FGP 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 FGP are equal to 41.6%.

Life of production assets of 10.6 years is the average useful life of capital assets used in Ferrellgas 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 FGP is equal to 2.7%. 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 - $0 million for Ferrellgas 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 97.156 million for Ferrellgas 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 Ferrellgas Partners, L.P. at the current share price and the inputted number of shares is $0.1 billion.

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