Intrinsic value of Grupo Aeroportuario del Centro Norte S.A - OMAB

Previous Close

$48.17

  Intrinsic Value

$229.83

stock screener

  Rating & Target

str. buy

+377%

Previous close

$48.17

 
Intrinsic value

$229.83

 
Up/down potential

+377%

 
Rating

str. buy

We calculate the intrinsic value of OMAB 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 2.4

 

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, %
  35.40
  32.36
  29.62
  27.16
  24.95
  22.95
  21.16
  19.54
  18.09
  16.78
  15.60
  14.54
  13.59
  12.73
  11.95
  11.26
  10.63
  10.07
  9.56
  9.11
  8.70
  8.33
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
  6.59
  6.43
Revenue, $m
  490
  649
  841
  1,069
  1,336
  1,643
  1,990
  2,379
  2,810
  3,281
  3,793
  4,344
  4,934
  5,562
  6,227
  6,928
  7,665
  8,437
  9,244
  10,086
  10,963
  11,876
  12,825
  13,812
  14,837
  15,903
  17,010
  18,162
  19,359
  20,604
Variable operating expenses, $m
  239
  312
  400
  506
  629
  770
  930
  1,109
  1,307
  1,524
  1,747
  2,001
  2,272
  2,562
  2,868
  3,191
  3,530
  3,886
  4,257
  4,645
  5,049
  5,469
  5,906
  6,361
  6,833
  7,324
  7,834
  8,364
  8,915
  9,489
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
  239
  312
  400
  506
  629
  770
  930
  1,109
  1,307
  1,524
  1,747
  2,001
  2,272
  2,562
  2,868
  3,191
  3,530
  3,886
  4,257
  4,645
  5,049
  5,469
  5,906
  6,361
  6,833
  7,324
  7,834
  8,364
  8,915
  9,489
Operating income, $m
  251
  337
  440
  564
  708
  873
  1,061
  1,270
  1,502
  1,757
  2,046
  2,344
  2,662
  3,001
  3,359
  3,738
  4,135
  4,552
  4,987
  5,441
  5,914
  6,406
  6,919
  7,451
  8,004
  8,579
  9,176
  9,797
  10,443
  11,115
EBITDA, $m
  285
  377
  489
  622
  777
  956
  1,158
  1,384
  1,634
  1,908
  2,206
  2,527
  2,870
  3,235
  3,622
  4,030
  4,459
  4,908
  5,377
  5,866
  6,377
  6,908
  7,460
  8,034
  8,630
  9,250
  9,894
  10,564
  11,260
  11,984
Interest expense (income), $m
  16
  18
  28
  41
  56
  73
  94
  118
  145
  175
  208
  245
  285
  327
  373
  422
  473
  528
  585
  645
  707
  773
  841
  912
  985
  1,062
  1,141
  1,224
  1,310
  1,399
  1,492
Earnings before tax, $m
  233
  308
  400
  508
  634
  779
  943
  1,126
  1,328
  1,548
  1,801
  2,059
  2,335
  2,628
  2,938
  3,264
  3,607
  3,967
  4,342
  4,733
  5,141
  5,566
  6,007
  6,466
  6,942
  7,438
  7,952
  8,488
  9,044
  9,623
Tax expense, $m
  63
  83
  108
  137
  171
  210
  255
  304
  358
  418
  486
  556
  630
  709
  793
  881
  974
  1,071
  1,172
  1,278
  1,388
  1,503
  1,622
  1,746
  1,874
  2,008
  2,147
  2,292
  2,442
  2,598
Net income, $m
  170
  225
  292
  371
  463
  569
  688
  822
  969
  1,130
  1,315
  1,503
  1,704
  1,918
  2,144
  2,383
  2,633
  2,896
  3,170
  3,455
  3,753
  4,063
  4,385
  4,720
  5,068
  5,430
  5,805
  6,196
  6,602
  7,025

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
  886
  1,173
  1,521
  1,934
  2,416
  2,971
  3,599
  4,302
  5,081
  5,933
  6,858
  7,856
  8,923
  10,059
  11,261
  12,529
  13,861
  15,257
  16,716
  18,238
  19,824
  21,475
  23,191
  24,976
  26,830
  28,757
  30,760
  32,842
  35,006
  37,258
Adjusted assets (=assets-cash), $m
  886
  1,173
  1,521
  1,934
  2,416
  2,971
  3,599
  4,302
  5,081
  5,933
  6,858
  7,856
  8,923
  10,059
  11,261
  12,529
  13,861
  15,257
  16,716
  18,238
  19,824
  21,475
  23,191
  24,976
  26,830
  28,757
  30,760
  32,842
  35,006
  37,258
Revenue / Adjusted assets
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
  0.553
Average production assets, $m
  170
  224
  291
  370
  462
  568
  689
  823
  972
  1,135
  1,312
  1,503
  1,707
  1,925
  2,155
  2,397
  2,652
  2,919
  3,198
  3,490
  3,793
  4,109
  4,437
  4,779
  5,134
  5,502
  5,886
  6,284
  6,698
  7,129
Working capital, $m
  4
  6
  8
  10
  12
  15
  18
  21
  25
  30
  34
  39
  44
  50
  56
  62
  69
  76
  83
  91
  99
  107
  115
  124
  134
  143
  153
  163
  174
  185
Total debt, $m
  363
  521
  712
  939
  1,204
  1,509
  1,855
  2,242
  2,670
  3,139
  3,648
  4,196
  4,783
  5,408
  6,069
  6,767
  7,499
  8,267
  9,069
  9,907
  10,779
  11,687
  12,631
  13,612
  14,632
  15,692
  16,794
  17,939
  19,129
  20,368
Total liabilities, $m
  487
  645
  836
  1,064
  1,329
  1,634
  1,980
  2,366
  2,794
  3,263
  3,772
  4,321
  4,908
  5,532
  6,194
  6,891
  7,624
  8,391
  9,194
  10,031
  10,903
  11,811
  12,755
  13,737
  14,757
  15,817
  16,918
  18,063
  19,254
  20,492
Total equity, $m
  399
  528
  684
  870
  1,087
  1,337
  1,620
  1,936
  2,286
  2,670
  3,086
  3,535
  4,015
  4,526
  5,067
  5,638
  6,238
  6,866
  7,522
  8,207
  8,921
  9,664
  10,436
  11,239
  12,074
  12,941
  13,842
  14,779
  15,753
  16,766
Total liabilities and equity, $m
  886
  1,173
  1,520
  1,934
  2,416
  2,971
  3,600
  4,302
  5,080
  5,933
  6,858
  7,856
  8,923
  10,058
  11,261
  12,529
  13,862
  15,257
  16,716
  18,238
  19,824
  21,475
  23,191
  24,976
  26,831
  28,758
  30,760
  32,842
  35,007
  37,258
Debt-to-equity ratio
  0.910
  0.990
  1.040
  1.080
  1.110
  1.130
  1.150
  1.160
  1.170
  1.180
  1.180
  1.190
  1.190
  1.190
  1.200
  1.200
  1.200
  1.200
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
  1.210
Adjusted equity ratio
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  170
  225
  292
  371
  463
  569
  688
  822
  969
  1,130
  1,315
  1,503
  1,704
  1,918
  2,144
  2,383
  2,633
  2,896
  3,170
  3,455
  3,753
  4,063
  4,385
  4,720
  5,068
  5,430
  5,805
  6,196
  6,602
  7,025
Depreciation, amort., depletion, $m
  34
  41
  49
  58
  70
  83
  97
  114
  132
  152
  160
  183
  208
  235
  263
  292
  323
  356
  390
  426
  463
  501
  541
  583
  626
  671
  718
  766
  817
  869
Funds from operations, $m
  204
  266
  341
  429
  533
  651
  785
  935
  1,101
  1,282
  1,475
  1,686
  1,912
  2,153
  2,407
  2,675
  2,957
  3,252
  3,560
  3,881
  4,216
  4,564
  4,926
  5,303
  5,694
  6,101
  6,523
  6,962
  7,419
  7,894
Change in working capital, $m
  1
  1
  2
  2
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
Cash from operations, $m
  203
  264
  339
  427
  530
  648
  782
  932
  1,097
  1,278
  1,470
  1,681
  1,907
  2,147
  2,401
  2,669
  2,950
  3,245
  3,552
  3,873
  4,208
  4,556
  4,918
  5,294
  5,685
  6,091
  6,513
  6,952
  7,408
  7,883
Maintenance CAPEX, $m
  -15
  -21
  -27
  -35
  -45
  -56
  -69
  -84
  -100
  -119
  -138
  -160
  -183
  -208
  -235
  -263
  -292
  -323
  -356
  -390
  -426
  -463
  -501
  -541
  -583
  -626
  -671
  -718
  -766
  -817
New CAPEX, $m
  -45
  -55
  -66
  -79
  -92
  -106
  -120
  -135
  -149
  -163
  -177
  -191
  -204
  -217
  -230
  -243
  -255
  -267
  -279
  -291
  -303
  -316
  -328
  -341
  -355
  -369
  -383
  -398
  -414
  -431
Cash from investing activities, $m
  -60
  -76
  -93
  -114
  -137
  -162
  -189
  -219
  -249
  -282
  -315
  -351
  -387
  -425
  -465
  -506
  -547
  -590
  -635
  -681
  -729
  -779
  -829
  -882
  -938
  -995
  -1,054
  -1,116
  -1,180
  -1,248
Free cash flow, $m
  143
  189
  245
  313
  393
  486
  593
  713
  848
  996
  1,155
  1,331
  1,520
  1,722
  1,936
  2,164
  2,403
  2,654
  2,917
  3,192
  3,479
  3,777
  4,088
  4,411
  4,747
  5,096
  5,459
  5,836
  6,228
  6,635
Issuance/(repayment) of debt, $m
  128
  158
  191
  227
  265
  305
  346
  387
  428
  469
  509
  548
  587
  625
  661
  697
  733
  768
  802
  837
  872
  908
  944
  981
  1,020
  1,060
  1,101
  1,145
  1,191
  1,238
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  
  128
  158
  191
  227
  265
  305
  346
  387
  428
  469
  509
  548
  587
  625
  661
  697
  733
  768
  802
  837
  872
  908
  944
  981
  1,020
  1,060
  1,101
  1,145
  1,191
  1,238
Total cash flow (excl. dividends), $m
  270
  347
  436
  540
  658
  791
  938
  1,100
  1,276
  1,465
  1,664
  1,879
  2,107
  2,346
  2,598
  2,861
  3,136
  3,422
  3,720
  4,029
  4,351
  4,685
  5,032
  5,393
  5,767
  6,156
  6,560
  6,981
  7,418
  7,874
Retained Cash Flow (-), $m
  -104
  -129
  -156
  -186
  -217
  -250
  -283
  -316
  -350
  -384
  -416
  -449
  -480
  -511
  -541
  -571
  -600
  -628
  -657
  -685
  -714
  -743
  -772
  -803
  -834
  -867
  -901
  -937
  -974
  -1,013
Prev. year cash balance distribution, $m
  65
  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
  231
  217
  280
  354
  441
  541
  656
  784
  926
  1,081
  1,247
  1,430
  1,626
  1,835
  2,057
  2,290
  2,536
  2,794
  3,063
  3,344
  3,637
  3,942
  4,260
  4,590
  4,933
  5,289
  5,659
  6,044
  6,444
  6,860
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  222
  199
  243
  291
  342
  393
  443
  490
  532
  567
  592
  610
  618
  616
  604
  582
  552
  514
  472
  425
  376
  327
  279
  234
  192
  154
  121
  94
  70
  52
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

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. is a holding company. The Company, through its subsidiaries, holds concessions to operate, maintain and develop over 10 airports in Mexico. The Company's segments include Metropolitan, Tourist, Regional, Border, Hotel and Other. The Company also engages in various commercial and diversification activities conducted at its airports, such as the leasing of space to restaurants and retailers, the operation of parking facilities, and the operation of the NH Terminal 2 Hotel and the Hilton Garden Inn Hotel at the Monterrey airport. The Company's airports serve the Monterrey metropolitan area; approximately three tourist destinations, such as Acapulco, Mazatlan and Zihuatanejo; over seven regional centers, such as Chihuahua, Culiacan, Durango, San Luis Potosi, Tampico, Torreon and Zacatecas, and approximately two border cities, such as Ciudad Juarez and Reynosa.

FINANCIAL RATIOS  of  Grupo Aeroportuario del Centro Norte S.A (OMAB)

Valuation Ratios
P/E Ratio 199.7
Price to Sales 67.5
Price to Book 57.1
Price to Tangible Book
Price to Cash Flow 156.8
Price to Free Cash Flow 210.8
Growth Rates
Sales Growth Rate 23.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 34.8%
Cap. Spend. - 3 Yr. Gr. Rate 7.1%
Financial Strength
Quick Ratio 51
Current Ratio 0
LT Debt to Equity 70.8%
Total Debt to Equity 71.7%
Interest Coverage 9
Management Effectiveness
Return On Assets 16.1%
Ret/ On Assets - 3 Yr. Avg. 12.6%
Return On Total Capital 17.2%
Ret/ On T. Cap. - 3 Yr. Avg. 13%
Return On Equity 30.2%
Return On Equity - 3 Yr. Avg. 22.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 81.1%
Gross Margin - 3 Yr. Avg. 76.6%
EBITDA Margin 58%
EBITDA Margin - 3 Yr. Avg. 51.3%
Operating Margin 50.2%
Oper. Margin - 3 Yr. Avg. 45%
Pre-Tax Margin 47.3%
Pre-Tax Margin - 3 Yr. Avg. 40.1%
Net Profit Margin 33.8%
Net Profit Margin - 3 Yr. Avg. 29.7%
Effective Tax Rate 28.6%
Eff/ Tax Rate - 3 Yr. Avg. 25.5%
Payout Ratio 72.6%

OMAB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OMAB stock intrinsic value calculation we used $362 million for the last fiscal year's total revenue generated by Grupo Aeroportuario del Centro Norte S.A. The default revenue input number comes from 0001 income statement of Grupo Aeroportuario del Centro Norte S.A. 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 OMAB stock valuation model: a) initial revenue growth rate of 35.4% 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 4.3%, whose default value for OMAB is calculated based on our internal credit rating of Grupo Aeroportuario del Centro Norte S.A, 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 Grupo Aeroportuario del Centro Norte S.A.
    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 OMAB stock the variable cost ratio is equal to 49.7%.

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 OMAB 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 Grupo Aeroportuario del Centro Norte S.A.

Corporate tax rate of 27% is the nominal tax rate for Grupo Aeroportuario del Centro Norte S.A. 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 OMAB 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 OMAB are equal to 34.6%.

Life of production assets of 8.2 years is the average useful life of capital assets used in Grupo Aeroportuario del Centro Norte S.A 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 OMAB is equal to 0.9%. 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 - $359.423843416 million for Grupo Aeroportuario del Centro Norte S.A - 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 49.241 million for Grupo Aeroportuario del Centro Norte S.A 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 Grupo Aeroportuario del Centro Norte S.A at the current share price and the inputted number of shares is $2.4 billion.

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