Intrinsic value of Matson, Inc. - MATX

Previous Close

$36.58

  Intrinsic Value

$21.14

stock screener

  Rating & Target

sell

-42%

Previous close

$36.58

 
Intrinsic value

$21.14

 
Up/down potential

-42%

 
Rating

sell

We calculate the intrinsic value of MATX 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 1.6

 

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, %
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  2,434
  2,654
  2,884
  3,123
  3,371
  3,629
  3,897
  4,176
  4,466
  4,767
  5,080
  5,406
  5,745
  6,098
  6,466
  6,849
  7,248
  7,665
  8,100
  8,555
  9,029
  9,525
  10,043
  10,586
  11,153
  11,747
  12,368
  13,019
  13,700
  14,415
Variable operating expenses, $m
  2,288
  2,490
  2,701
  2,920
  3,148
  3,384
  3,631
  3,886
  4,152
  4,429
  4,662
  4,961
  5,272
  5,596
  5,933
  6,285
  6,651
  7,034
  7,433
  7,850
  8,285
  8,740
  9,216
  9,714
  10,234
  10,779
  11,349
  11,946
  12,572
  13,227
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
  2,288
  2,490
  2,701
  2,920
  3,148
  3,384
  3,631
  3,886
  4,152
  4,429
  4,662
  4,961
  5,272
  5,596
  5,933
  6,285
  6,651
  7,034
  7,433
  7,850
  8,285
  8,740
  9,216
  9,714
  10,234
  10,779
  11,349
  11,946
  12,572
  13,227
Operating income, $m
  146
  164
  183
  203
  224
  245
  267
  290
  314
  339
  419
  445
  473
  502
  533
  564
  597
  631
  667
  705
  744
  785
  827
  872
  919
  968
  1,019
  1,073
  1,129
  1,187
EBITDA, $m
  288
  314
  342
  370
  399
  430
  462
  495
  529
  565
  602
  640
  681
  722
  766
  811
  859
  908
  960
  1,013
  1,070
  1,128
  1,190
  1,254
  1,321
  1,392
  1,465
  1,542
  1,623
  1,708
Interest expense (income), $m
  0
  46
  55
  64
  73
  83
  93
  103
  114
  126
  137
  150
  162
  176
  189
  204
  219
  234
  251
  267
  285
  304
  323
  343
  364
  386
  409
  433
  459
  485
  513
Earnings before tax, $m
  100
  110
  120
  130
  141
  152
  164
  176
  188
  201
  269
  283
  298
  313
  329
  346
  363
  381
  400
  420
  440
  462
  484
  508
  533
  558
  585
  614
  643
  675
Tax expense, $m
  27
  30
  32
  35
  38
  41
  44
  47
  51
  54
  73
  76
  80
  85
  89
  93
  98
  103
  108
  113
  119
  125
  131
  137
  144
  151
  158
  166
  174
  182
Net income, $m
  73
  80
  87
  95
  103
  111
  119
  128
  137
  147
  196
  207
  217
  228
  240
  252
  265
  278
  292
  306
  321
  337
  354
  371
  389
  408
  427
  448
  470
  492

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
  2,660
  2,901
  3,152
  3,413
  3,684
  3,966
  4,260
  4,564
  4,881
  5,210
  5,552
  5,908
  6,279
  6,664
  7,066
  7,485
  7,922
  8,377
  8,853
  9,349
  9,868
  10,410
  10,976
  11,569
  12,189
  12,838
  13,517
  14,228
  14,973
  15,754
Adjusted assets (=assets-cash), $m
  2,660
  2,901
  3,152
  3,413
  3,684
  3,966
  4,260
  4,564
  4,881
  5,210
  5,552
  5,908
  6,279
  6,664
  7,066
  7,485
  7,922
  8,377
  8,853
  9,349
  9,868
  10,410
  10,976
  11,569
  12,189
  12,838
  13,517
  14,228
  14,973
  15,754
Revenue / Adjusted assets
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
  0.915
Average production assets, $m
  1,687
  1,840
  1,999
  2,164
  2,336
  2,515
  2,701
  2,894
  3,095
  3,304
  3,521
  3,746
  3,981
  4,226
  4,481
  4,746
  5,023
  5,312
  5,613
  5,928
  6,257
  6,601
  6,960
  7,336
  7,729
  8,140
  8,571
  9,022
  9,494
  9,989
Working capital, $m
  -32
  -35
  -37
  -41
  -44
  -47
  -51
  -54
  -58
  -62
  -66
  -70
  -75
  -79
  -84
  -89
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -145
  -153
  -161
  -169
  -178
  -187
Total debt, $m
  1,014
  1,180
  1,353
  1,533
  1,720
  1,914
  2,116
  2,326
  2,544
  2,771
  3,007
  3,252
  3,507
  3,773
  4,050
  4,339
  4,639
  4,953
  5,281
  5,623
  5,980
  6,354
  6,744
  7,152
  7,580
  8,027
  8,495
  8,985
  9,498
  10,036
Total liabilities, $m
  1,833
  1,999
  2,172
  2,351
  2,538
  2,733
  2,935
  3,145
  3,363
  3,590
  3,825
  4,071
  4,326
  4,592
  4,869
  5,157
  5,458
  5,772
  6,100
  6,442
  6,799
  7,172
  7,563
  7,971
  8,398
  8,845
  9,313
  9,803
  10,317
  10,854
Total equity, $m
  827
  902
  980
  1,061
  1,146
  1,234
  1,325
  1,419
  1,518
  1,620
  1,727
  1,837
  1,953
  2,073
  2,198
  2,328
  2,464
  2,605
  2,753
  2,908
  3,069
  3,237
  3,414
  3,598
  3,791
  3,993
  4,204
  4,425
  4,657
  4,899
Total liabilities and equity, $m
  2,660
  2,901
  3,152
  3,412
  3,684
  3,967
  4,260
  4,564
  4,881
  5,210
  5,552
  5,908
  6,279
  6,665
  7,067
  7,485
  7,922
  8,377
  8,853
  9,350
  9,868
  10,409
  10,977
  11,569
  12,189
  12,838
  13,517
  14,228
  14,974
  15,753
Debt-to-equity ratio
  1.230
  1.310
  1.380
  1.440
  1.500
  1.550
  1.600
  1.640
  1.680
  1.710
  1.740
  1.770
  1.800
  1.820
  1.840
  1.860
  1.880
  1.900
  1.920
  1.930
  1.950
  1.960
  1.980
  1.990
  2.000
  2.010
  2.020
  2.030
  2.040
  2.050
Adjusted equity ratio
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  73
  80
  87
  95
  103
  111
  119
  128
  137
  147
  196
  207
  217
  228
  240
  252
  265
  278
  292
  306
  321
  337
  354
  371
  389
  408
  427
  448
  470
  492
Depreciation, amort., depletion, $m
  142
  150
  158
  167
  176
  185
  195
  205
  215
  226
  183
  195
  207
  220
  233
  247
  262
  277
  292
  309
  326
  344
  363
  382
  403
  424
  446
  470
  495
  520
Funds from operations, $m
  215
  230
  246
  262
  279
  296
  314
  333
  353
  373
  380
  402
  425
  449
  473
  499
  527
  555
  584
  615
  647
  681
  716
  753
  791
  832
  874
  918
  964
  1,013
Change in working capital, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
Cash from operations, $m
  218
  233
  249
  265
  282
  299
  318
  337
  356
  377
  384
  406
  429
  453
  478
  504
  532
  560
  590
  621
  653
  687
  723
  760
  799
  839
  882
  926
  973
  1,022
Maintenance CAPEX, $m
  -80
  -88
  -96
  -104
  -113
  -122
  -131
  -141
  -151
  -161
  -172
  -183
  -195
  -207
  -220
  -233
  -247
  -262
  -277
  -292
  -309
  -326
  -344
  -363
  -382
  -403
  -424
  -446
  -470
  -495
New CAPEX, $m
  -147
  -153
  -159
  -165
  -172
  -179
  -186
  -193
  -201
  -209
  -217
  -226
  -235
  -245
  -255
  -266
  -277
  -289
  -301
  -315
  -329
  -344
  -359
  -376
  -393
  -411
  -431
  -451
  -472
  -495
Cash from investing activities, $m
  -227
  -241
  -255
  -269
  -285
  -301
  -317
  -334
  -352
  -370
  -389
  -409
  -430
  -452
  -475
  -499
  -524
  -551
  -578
  -607
  -638
  -670
  -703
  -739
  -775
  -814
  -855
  -897
  -942
  -990
Free cash flow, $m
  -9
  -8
  -6
  -5
  -3
  -1
  1
  3
  5
  7
  -5
  -3
  -1
  1
  3
  5
  8
  10
  12
  14
  16
  18
  20
  22
  23
  25
  27
  29
  31
  33
Issuance/(repayment) of debt, $m
  158
  166
  173
  180
  187
  194
  202
  210
  218
  227
  236
  245
  255
  266
  277
  289
  301
  314
  328
  342
  357
  373
  390
  408
  427
  447
  468
  490
  513
  538
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  
  158
  166
  173
  180
  187
  194
  202
  210
  218
  227
  236
  245
  255
  266
  277
  289
  301
  314
  328
  342
  357
  373
  390
  408
  427
  447
  468
  490
  513
  538
Total cash flow (excl. dividends), $m
  148
  158
  167
  175
  184
  193
  203
  213
  223
  234
  230
  242
  254
  267
  280
  294
  308
  324
  339
  356
  373
  391
  410
  430
  451
  472
  495
  519
  544
  570
Retained Cash Flow (-), $m
  -72
  -75
  -78
  -81
  -84
  -88
  -91
  -95
  -98
  -102
  -106
  -111
  -115
  -120
  -125
  -130
  -136
  -142
  -148
  -154
  -161
  -169
  -176
  -184
  -193
  -202
  -211
  -221
  -232
  -243
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
  76
  83
  89
  94
  100
  106
  112
  118
  125
  132
  124
  131
  139
  147
  155
  164
  173
  182
  191
  201
  212
  223
  234
  246
  258
  271
  284
  298
  312
  328
Discount rate, %
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
  72
  73
  72
  70
  68
  65
  62
  58
  54
  50
  40
  36
  32
  28
  25
  21
  18
  14
  12
  9
  7
  5
  4
  3
  2
  1
  1
  1
  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

Matson, Inc., through its subsidiaries, operates as an ocean cargo carrier. The company operates in two segments, Ocean Transportation and Logistics. The Ocean Transportation segment offers ocean transportation services to the domestic economies of Hawaii, Alaska, and Guam, as well as to other island economies in Micronesia and in the South Pacific. This segment also operates an expedited service from China to Long Beach, California; and provides container and conventional freight services between New Zealand and other South Pacific Islands including Fiji, Samoa, American Samoa, Tonga, the Cook Islands, Niue, Vanuatu, Nauru, and the Solomon Islands. It primarily transports mixed commodities, refrigerated commodities, packaged foods, household goods, automobiles, and seafood; general sustenance cargo; and garments, footwear, and other retail merchandise. This segment also offers container stevedoring, container equipment maintenance, and other terminal services on the islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, Dutch Harbor, and Akutan. It operates a fleet of 23 owned and 3 chartered vessels, including 17 containerships; 2 combination container/roll-on/roll-off ships; 1 roll-on/roll-off barge; and 3 container barges equipped with cranes. The Logistics segment provides multimodal transportation services, including domestic and international rail intermodal service; long-haul and regional highway brokerage, specialized hauling, flat-bed and project work, less-than-truckload, and expedited freight; and supply chain management, and warehousing and distribution services. This segment also offers freight forwarding, consolidation, customs brokerage, purchase order management, and non-vessel operating common carrier services. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. Matson, Inc. was founded in 1882 and is headquartered in Honolulu, Hawaii.

FINANCIAL RATIOS  of  Matson, Inc. (MATX)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MATX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MATX stock intrinsic value calculation we used $2223 million for the last fiscal year's total revenue generated by Matson, Inc.. The default revenue input number comes from 0001 income statement of Matson, 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 MATX stock valuation model: a) initial revenue growth rate of 9.5% 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 6.6%, whose default value for MATX is calculated based on our internal credit rating of Matson, 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 Matson, 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 MATX stock the variable cost ratio is equal to 94.2%.

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 MATX 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 Matson, Inc..

Corporate tax rate of 27% is the nominal tax rate for Matson, 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 MATX 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 MATX are equal to 69.3%.

Life of production assets of 19.2 years is the average useful life of capital assets used in Matson, 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 MATX is equal to -1.3%. 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 - $755.3 million for Matson, 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 42.751 million for Matson, 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 Matson, Inc. at the current share price and the inputted number of shares is $1.6 billion.

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