Intrinsic value of Grupo Aeroportuario Del Pacifico, S.A. d - PAC

Previous Close

$88.05

  Intrinsic Value

$185.65

stock screener

  Rating & Target

str. buy

+111%

Previous close

$88.05

 
Intrinsic value

$185.65

 
Up/down potential

+111%

 
Rating

str. buy

We calculate the intrinsic value of PAC 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 4.9

 

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, %
  17.30
  16.07
  14.96
  13.97
  13.07
  12.26
  11.54
  10.88
  10.29
  9.77
  9.29
  8.86
  8.47
  8.13
  7.81
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
  6.21
  6.09
  5.98
  5.88
  5.79
  5.72
  5.64
  5.58
Revenue, $m
  738
  856
  985
  1,122
  1,269
  1,424
  1,589
  1,761
  1,943
  2,133
  2,331
  2,537
  2,752
  2,976
  3,208
  3,450
  3,701
  3,962
  4,233
  4,515
  4,809
  5,114
  5,431
  5,762
  6,107
  6,466
  6,841
  7,232
  7,640
  8,066
Variable operating expenses, $m
  219
  235
  252
  271
  291
  312
  335
  358
  383
  409
  318
  346
  376
  406
  438
  471
  505
  541
  578
  617
  657
  698
  742
  787
  834
  883
  934
  988
  1,043
  1,101
Fixed operating expenses, $m
  113
  116
  118
  121
  124
  126
  129
  132
  135
  138
  141
  144
  147
  151
  154
  157
  161
  164
  168
  172
  175
  179
  183
  187
  191
  195
  200
  204
  209
  213
Total operating expenses, $m
  332
  351
  370
  392
  415
  438
  464
  490
  518
  547
  459
  490
  523
  557
  592
  628
  666
  705
  746
  789
  832
  877
  925
  974
  1,025
  1,078
  1,134
  1,192
  1,252
  1,314
Operating income, $m
  406
  506
  614
  730
  854
  985
  1,124
  1,271
  1,425
  1,585
  1,871
  2,046
  2,229
  2,419
  2,616
  2,822
  3,035
  3,257
  3,487
  3,727
  3,977
  4,236
  4,506
  4,788
  5,082
  5,388
  5,707
  6,040
  6,388
  6,751
EBITDA, $m
  569
  677
  793
  917
  1,050
  1,192
  1,341
  1,498
  1,663
  1,836
  2,016
  2,204
  2,400
  2,604
  2,815
  3,036
  3,265
  3,503
  3,750
  4,007
  4,275
  4,554
  4,844
  5,146
  5,461
  5,789
  6,132
  6,489
  6,862
  7,252
Interest expense (income), $m
  18
  37
  46
  56
  66
  77
  89
  102
  115
  129
  144
  160
  176
  193
  210
  228
  247
  267
  287
  309
  331
  354
  378
  403
  429
  455
  484
  513
  543
  575
  609
Earnings before tax, $m
  369
  460
  558
  664
  777
  896
  1,023
  1,156
  1,295
  1,441
  1,712
  1,871
  2,036
  2,209
  2,388
  2,574
  2,768
  2,969
  3,179
  3,396
  3,623
  3,858
  4,104
  4,360
  4,626
  4,904
  5,194
  5,496
  5,813
  6,143
Tax expense, $m
  100
  124
  151
  179
  210
  242
  276
  312
  350
  389
  462
  505
  550
  596
  645
  695
  747
  802
  858
  917
  978
  1,042
  1,108
  1,177
  1,249
  1,324
  1,402
  1,484
  1,569
  1,659
Net income, $m
  269
  336
  407
  485
  567
  654
  747
  844
  946
  1,052
  1,250
  1,366
  1,487
  1,612
  1,743
  1,879
  2,021
  2,168
  2,320
  2,479
  2,645
  2,817
  2,996
  3,182
  3,377
  3,580
  3,792
  4,012
  4,243
  4,484

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
  2,021
  2,346
  2,697
  3,074
  3,476
  3,902
  4,352
  4,826
  5,323
  5,843
  6,385
  6,951
  7,540
  8,153
  8,790
  9,452
  10,140
  10,855
  11,598
  12,371
  13,174
  14,010
  14,880
  15,786
  16,731
  17,715
  18,741
  19,813
  20,931
  22,099
Adjusted assets (=assets-cash), $m
  2,021
  2,346
  2,697
  3,074
  3,476
  3,902
  4,352
  4,826
  5,323
  5,843
  6,385
  6,951
  7,540
  8,153
  8,790
  9,452
  10,140
  10,855
  11,598
  12,371
  13,174
  14,010
  14,880
  15,786
  16,731
  17,715
  18,741
  19,813
  20,931
  22,099
Revenue / Adjusted assets
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
Average production assets, $m
  765
  888
  1,021
  1,164
  1,316
  1,477
  1,647
  1,827
  2,015
  2,211
  2,417
  2,631
  2,854
  3,086
  3,327
  3,578
  3,838
  4,109
  4,390
  4,682
  4,986
  5,303
  5,632
  5,975
  6,333
  6,705
  7,094
  7,499
  7,922
  8,364
Working capital, $m
  -54
  -63
  -72
  -82
  -93
  -104
  -116
  -129
  -142
  -156
  -170
  -185
  -201
  -217
  -234
  -252
  -270
  -289
  -309
  -330
  -351
  -373
  -396
  -421
  -446
  -472
  -499
  -528
  -558
  -589
Total debt, $m
  835
  1,010
  1,200
  1,404
  1,621
  1,852
  2,096
  2,352
  2,621
  2,902
  3,195
  3,501
  3,820
  4,152
  4,496
  4,854
  5,227
  5,613
  6,015
  6,433
  6,868
  7,320
  7,791
  8,281
  8,792
  9,325
  9,880
  10,460
  11,064
  11,696
Total liabilities, $m
  1,094
  1,269
  1,459
  1,663
  1,880
  2,111
  2,355
  2,611
  2,880
  3,161
  3,454
  3,760
  4,079
  4,411
  4,755
  5,113
  5,486
  5,872
  6,274
  6,692
  7,127
  7,579
  8,050
  8,540
  9,051
  9,584
  10,139
  10,719
  11,324
  11,955
Total equity, $m
  928
  1,077
  1,238
  1,411
  1,595
  1,791
  1,998
  2,215
  2,443
  2,682
  2,931
  3,190
  3,461
  3,742
  4,034
  4,338
  4,654
  4,982
  5,323
  5,678
  6,047
  6,431
  6,830
  7,246
  7,679
  8,131
  8,602
  9,094
  9,607
  10,143
Total liabilities and equity, $m
  2,022
  2,346
  2,697
  3,074
  3,475
  3,902
  4,353
  4,826
  5,323
  5,843
  6,385
  6,950
  7,540
  8,153
  8,789
  9,451
  10,140
  10,854
  11,597
  12,370
  13,174
  14,010
  14,880
  15,786
  16,730
  17,715
  18,741
  19,813
  20,931
  22,098
Debt-to-equity ratio
  0.900
  0.940
  0.970
  1.000
  1.020
  1.030
  1.050
  1.060
  1.070
  1.080
  1.090
  1.100
  1.100
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
  1.140
  1.150
  1.150
  1.150
  1.150
  1.150
Adjusted equity ratio
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459
  0.459

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  269
  336
  407
  485
  567
  654
  747
  844
  946
  1,052
  1,250
  1,366
  1,487
  1,612
  1,743
  1,879
  2,021
  2,168
  2,320
  2,479
  2,645
  2,817
  2,996
  3,182
  3,377
  3,580
  3,792
  4,012
  4,243
  4,484
Depreciation, amort., depletion, $m
  164
  171
  179
  188
  197
  206
  217
  227
  239
  250
  145
  158
  171
  185
  199
  214
  230
  246
  263
  280
  299
  318
  337
  358
  379
  402
  425
  449
  474
  501
Funds from operations, $m
  433
  507
  586
  672
  764
  861
  963
  1,071
  1,184
  1,302
  1,394
  1,523
  1,657
  1,797
  1,942
  2,093
  2,250
  2,414
  2,583
  2,760
  2,943
  3,134
  3,333
  3,540
  3,756
  3,981
  4,216
  4,461
  4,718
  4,985
Change in working capital, $m
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
Cash from operations, $m
  441
  515
  596
  682
  774
  872
  975
  1,084
  1,197
  1,316
  1,409
  1,538
  1,673
  1,813
  1,959
  2,111
  2,269
  2,433
  2,603
  2,780
  2,965
  3,156
  3,356
  3,564
  3,781
  4,008
  4,244
  4,490
  4,747
  5,016
Maintenance CAPEX, $m
  -39
  -46
  -53
  -61
  -70
  -79
  -88
  -99
  -109
  -121
  -132
  -145
  -158
  -171
  -185
  -199
  -214
  -230
  -246
  -263
  -280
  -299
  -318
  -337
  -358
  -379
  -402
  -425
  -449
  -474
New CAPEX, $m
  -113
  -123
  -133
  -143
  -152
  -161
  -170
  -179
  -188
  -197
  -205
  -214
  -223
  -232
  -241
  -251
  -260
  -271
  -281
  -292
  -304
  -316
  -329
  -343
  -357
  -373
  -389
  -405
  -423
  -442
Cash from investing activities, $m
  -152
  -169
  -186
  -204
  -222
  -240
  -258
  -278
  -297
  -318
  -337
  -359
  -381
  -403
  -426
  -450
  -474
  -501
  -527
  -555
  -584
  -615
  -647
  -680
  -715
  -752
  -791
  -830
  -872
  -916
Free cash flow, $m
  289
  347
  410
  478
  553
  632
  716
  806
  900
  999
  1,071
  1,179
  1,293
  1,411
  1,533
  1,661
  1,794
  1,932
  2,076
  2,225
  2,380
  2,541
  2,709
  2,884
  3,066
  3,256
  3,454
  3,660
  3,875
  4,100
Issuance/(repayment) of debt, $m
  161
  176
  190
  204
  217
  231
  244
  256
  269
  281
  294
  306
  319
  331
  345
  358
  372
  387
  402
  418
  435
  452
  471
  490
  511
  532
  555
  579
  605
  632
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  
  161
  176
  190
  204
  217
  231
  244
  256
  269
  281
  294
  306
  319
  331
  345
  358
  372
  387
  402
  418
  435
  452
  471
  490
  511
  532
  555
  579
  605
  632
Total cash flow (excl. dividends), $m
  450
  522
  600
  682
  770
  862
  960
  1,062
  1,169
  1,280
  1,364
  1,485
  1,611
  1,742
  1,878
  2,019
  2,166
  2,319
  2,478
  2,643
  2,815
  2,994
  3,180
  3,374
  3,577
  3,788
  4,009
  4,239
  4,480
  4,732
Retained Cash Flow (-), $m
  -135
  -149
  -161
  -173
  -184
  -196
  -207
  -217
  -228
  -239
  -249
  -260
  -270
  -281
  -292
  -304
  -316
  -328
  -341
  -355
  -369
  -384
  -399
  -416
  -433
  -452
  -471
  -492
  -513
  -536
Prev. year cash balance distribution, $m
  276
  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
  591
  373
  439
  509
  585
  667
  753
  844
  941
  1,042
  1,115
  1,226
  1,341
  1,461
  1,586
  1,716
  1,851
  1,991
  2,137
  2,288
  2,446
  2,610
  2,781
  2,958
  3,144
  3,337
  3,538
  3,748
  3,967
  4,196
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
  566
  342
  382
  419
  454
  484
  509
  528
  540
  546
  530
  523
  510
  490
  466
  436
  403
  367
  329
  291
  253
  217
  182
  151
  122
  97
  76
  58
  43
  32
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 Pacifico, S.A.B. de C.V. is a holding company. The Company holds concessions to operate, maintain and develop approximately 10 international airports in the Pacific and Central regions of Mexico, and an international airport in Jamaica. The Company's segments include Guadalajara, Tijuana, Puerto Vallarta, San Jose del Cabo, Montego Bay, Hermosillo, Bajio, Other Airports and Others Companies. The Other Companies segment includes Servicios a la Infraestructura Aeroportuaria del Pacifico, S.A. de C.V. (SIAP), a company that provides technical assistance and professional services; Corporativo de Servicios Aeroportuarios, S.A. de C.V. (CORSA), a company that provides operative services specialized in aeronautical industry; Puerta Cero Parking, S.A. de C.V. (PCP), a company that manages the parking lot operation; Fundacion Grupo Aeroportuario del Pacifico, A.C., and Desarrollo de Concesiones Aeroportuarias, S.L. (DCA), as well as the Company's own operation.

FINANCIAL RATIOS  of  Grupo Aeroportuario Del Pacifico, S.A. d (PAC)

Valuation Ratios
P/E Ratio 278.8
Price to Sales 82.2
Price to Book 42.8
Price to Tangible Book
Price to Cash Flow 161.8
Price to Free Cash Flow 241
Growth Rates
Sales Growth Rate 37%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 64.9%
Cap. Spend. - 3 Yr. Gr. Rate 21.8%
Financial Strength
Quick Ratio 66
Current Ratio 0
LT Debt to Equity 45.6%
Total Debt to Equity 46%
Interest Coverage 14
Management Effectiveness
Return On Assets 10.5%
Ret/ On Assets - 3 Yr. Avg. 10%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.5%
Return On Equity 15.4%
Return On Equity - 3 Yr. Avg. 12.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 56.7%
Gross Margin - 3 Yr. Avg. 56.7%
EBITDA Margin 56.8%
EBITDA Margin - 3 Yr. Avg. 62.1%
Operating Margin 47.1%
Oper. Margin - 3 Yr. Avg. 49.1%
Pre-Tax Margin 41.6%
Pre-Tax Margin - 3 Yr. Avg. 45.3%
Net Profit Margin 29.5%
Net Profit Margin - 3 Yr. Avg. 34.5%
Effective Tax Rate 27.4%
Eff/ Tax Rate - 3 Yr. Avg. 23.1%
Payout Ratio 65.1%

PAC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PAC stock intrinsic value calculation we used $629 million for the last fiscal year's total revenue generated by Grupo Aeroportuario Del Pacifico, S.A. d. The default revenue input number comes from 0001 income statement of Grupo Aeroportuario Del Pacifico, S.A. d. 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 PAC stock valuation model: a) initial revenue growth rate of 17.3% 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 PAC is calculated based on our internal credit rating of Grupo Aeroportuario Del Pacifico, S.A. d, 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 Pacifico, S.A. d.
    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 PAC stock the variable cost ratio is equal to 32.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $111 million in the base year in the intrinsic value calculation for PAC 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 5.5% for Grupo Aeroportuario Del Pacifico, S.A. d.

Corporate tax rate of 27% is the nominal tax rate for Grupo Aeroportuario Del Pacifico, S.A. d. 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 PAC 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 PAC are equal to 103.7%.

Life of production assets of 16.7 years is the average useful life of capital assets used in Grupo Aeroportuario Del Pacifico, S.A. d 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 PAC is equal to -7.3%. 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 - $1069.05007626 million for Grupo Aeroportuario Del Pacifico, S.A. d - 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 56.076 million for Grupo Aeroportuario Del Pacifico, S.A. d 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 Pacifico, S.A. d at the current share price and the inputted number of shares is $4.9 billion.

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