Intrinsic value of SunTrust Banks - STI

Previous Close

$73.07

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$73.07

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as STI.

We calculate the intrinsic value of STI 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 2017), $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 35.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
  5.02
  5.02
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.00
Revenue, $m
  9,015
  9,474
  9,956
  10,461
  10,991
  11,547
  12,130
  12,743
  13,385
  14,060
  14,767
  15,510
  16,290
  17,109
  17,968
  18,871
  19,818
  20,812
  21,855
  22,951
  24,101
  25,309
  26,577
  27,908
  29,306
  30,773
  32,314
  33,932
  35,630
  37,413
Variable operating expenses, $m
  6,040
  6,348
  6,670
  7,009
  7,364
  7,736
  8,127
  8,537
  8,968
  9,420
  9,894
  10,392
  10,915
  11,463
  12,039
  12,643
  13,278
  13,944
  14,643
  15,377
  16,148
  16,957
  17,807
  18,699
  19,635
  20,618
  21,650
  22,734
  23,872
  25,067
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
  6,040
  6,348
  6,670
  7,009
  7,364
  7,736
  8,127
  8,537
  8,968
  9,420
  9,894
  10,392
  10,915
  11,463
  12,039
  12,643
  13,278
  13,944
  14,643
  15,377
  16,148
  16,957
  17,807
  18,699
  19,635
  20,618
  21,650
  22,734
  23,872
  25,067
Operating income, $m
  2,975
  3,127
  3,285
  3,452
  3,627
  3,810
  4,003
  4,205
  4,417
  4,640
  4,873
  5,118
  5,376
  5,646
  5,930
  6,227
  6,540
  6,868
  7,212
  7,574
  7,953
  8,352
  8,770
  9,210
  9,671
  10,155
  10,664
  11,197
  11,758
  12,346
EBITDA, $m
  24,564
  25,815
  27,126
  28,503
  29,946
  31,461
  33,051
  34,720
  36,470
  38,308
  40,237
  42,261
  44,386
  46,617
  48,958
  51,416
  53,997
  56,706
  59,549
  62,535
  65,669
  68,960
  72,415
  76,042
  79,850
  83,848
  88,046
  92,454
  97,081
  101,940
Interest expense (income), $m
  559
  9,778
  9,318
  9,739
  10,180
  10,643
  11,129
  11,639
  12,174
  12,736
  13,325
  13,943
  14,593
  15,274
  15,989
  16,740
  17,528
  18,355
  19,223
  20,135
  21,092
  22,097
  23,152
  24,259
  25,422
  26,643
  27,924
  29,270
  30,683
  32,166
  33,723
Earnings before tax, $m
  -6,802
  -6,192
  -6,454
  -6,728
  -7,017
  -7,319
  -7,636
  -7,969
  -8,319
  -8,685
  -9,070
  -9,474
  -9,898
  -10,343
  -10,810
  -11,301
  -11,815
  -12,356
  -12,923
  -13,518
  -14,143
  -14,800
  -15,489
  -16,212
  -16,972
  -17,769
  -18,606
  -19,485
  -20,408
  -21,377
Tax expense, $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
Net income, $m
  -6,802
  -6,192
  -6,454
  -6,728
  -7,017
  -7,319
  -7,636
  -7,969
  -8,319
  -8,685
  -9,070
  -9,474
  -9,898
  -10,343
  -10,810
  -11,301
  -11,815
  -12,356
  -12,923
  -13,518
  -14,143
  -14,800
  -15,489
  -16,212
  -16,972
  -17,769
  -18,606
  -19,485
  -20,408
  -21,377

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
  170,103
  178,762
  187,844
  197,374
  207,372
  217,863
  228,872
  240,425
  252,550
  265,275
  278,631
  292,650
  307,365
  322,812
  339,026
  356,047
  373,916
  392,674
  412,366
  433,040
  454,745
  477,532
  501,456
  526,573
  552,944
  580,630
  609,699
  640,220
  672,264
  705,909
Adjusted assets (=assets-cash), $m
  170,103
  178,762
  187,844
  197,374
  207,372
  217,863
  228,872
  240,425
  252,550
  265,275
  278,631
  292,650
  307,365
  322,812
  339,026
  356,047
  373,916
  392,674
  412,366
  433,040
  454,745
  477,532
  501,456
  526,573
  552,944
  580,630
  609,699
  640,220
  672,264
  705,909
Revenue / Adjusted assets
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
Average production assets, $m
  215,894
  226,883
  238,411
  250,505
  263,194
  276,510
  290,482
  305,145
  320,534
  336,685
  353,636
  371,429
  390,105
  409,710
  430,289
  451,892
  474,570
  498,378
  523,372
  549,611
  577,158
  606,079
  636,443
  668,322
  701,791
  736,931
  773,825
  812,561
  853,232
  895,934
Working capital, $m
  -181,491
  -190,728
  -200,419
  -210,586
  -221,254
  -232,447
  -244,193
  -256,520
  -269,456
  -283,033
  -297,284
  -312,241
  -327,941
  -344,422
  -361,722
  -379,882
  -398,947
  -418,961
  -439,971
  -462,029
  -485,187
  -509,500
  -535,025
  -561,823
  -589,959
  -619,500
  -650,515
  -683,078
  -717,268
  -753,165
Total debt, $m
  172,558
  180,350
  188,525
  197,101
  206,100
  215,542
  225,450
  235,847
  246,760
  258,212
  270,233
  282,850
  296,094
  309,996
  324,589
  339,908
  355,989
  372,871
  390,595
  409,201
  428,736
  449,244
  470,775
  493,381
  517,114
  542,032
  568,195
  595,663
  624,503
  654,783
Total liabilities, $m
  153,093
  160,885
  169,060
  177,636
  186,635
  196,077
  205,985
  216,382
  227,295
  238,747
  250,768
  263,385
  276,629
  290,531
  305,124
  320,443
  336,524
  353,406
  371,130
  389,736
  409,271
  429,779
  451,310
  473,916
  497,649
  522,567
  548,730
  576,198
  605,038
  635,318
Total equity, $m
  17,010
  17,876
  18,784
  19,737
  20,737
  21,786
  22,887
  24,042
  25,255
  26,527
  27,863
  29,265
  30,737
  32,281
  33,903
  35,605
  37,392
  39,267
  41,237
  43,304
  45,475
  47,753
  50,146
  52,657
  55,294
  58,063
  60,970
  64,022
  67,226
  70,591
Total liabilities and equity, $m
  170,103
  178,761
  187,844
  197,373
  207,372
  217,863
  228,872
  240,424
  252,550
  265,274
  278,631
  292,650
  307,366
  322,812
  339,027
  356,048
  373,916
  392,673
  412,367
  433,040
  454,746
  477,532
  501,456
  526,573
  552,943
  580,630
  609,700
  640,220
  672,264
  705,909
Debt-to-equity ratio
  10.140
  10.090
  10.040
  9.990
  9.940
  9.890
  9.850
  9.810
  9.770
  9.730
  9.700
  9.670
  9.630
  9.600
  9.570
  9.550
  9.520
  9.500
  9.470
  9.450
  9.430
  9.410
  9.390
  9.370
  9.350
  9.340
  9.320
  9.300
  9.290
  9.280
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
  -6,802
  -6,192
  -6,454
  -6,728
  -7,017
  -7,319
  -7,636
  -7,969
  -8,319
  -8,685
  -9,070
  -9,474
  -9,898
  -10,343
  -10,810
  -11,301
  -11,815
  -12,356
  -12,923
  -13,518
  -14,143
  -14,800
  -15,489
  -16,212
  -16,972
  -17,769
  -18,606
  -19,485
  -20,408
  -21,377
Depreciation, amort., depletion, $m
  21,589
  22,688
  23,841
  25,050
  26,319
  27,651
  29,048
  30,515
  32,053
  33,668
  35,364
  37,143
  39,011
  40,971
  43,029
  45,189
  47,457
  49,838
  52,337
  54,961
  57,716
  60,608
  63,644
  66,832
  70,179
  73,693
  77,383
  81,256
  85,323
  89,593
Funds from operations, $m
  14,787
  16,497
  17,388
  18,322
  19,303
  20,332
  21,412
  22,545
  23,735
  24,983
  26,293
  27,669
  29,112
  30,628
  32,219
  33,889
  35,642
  37,482
  39,414
  41,443
  43,572
  45,808
  48,156
  50,620
  53,208
  55,924
  58,776
  61,771
  64,915
  68,217
Change in working capital, $m
  -8,807
  -9,238
  -9,691
  -10,167
  -10,667
  -11,193
  -11,746
  -12,326
  -12,936
  -13,577
  -14,250
  -14,957
  -15,700
  -16,480
  -17,300
  -18,161
  -19,065
  -20,014
  -21,011
  -22,058
  -23,158
  -24,312
  -25,525
  -26,799
  -28,136
  -29,540
  -31,015
  -32,564
  -34,190
  -35,897
Cash from operations, $m
  23,594
  25,735
  27,078
  28,489
  29,970
  31,525
  33,158
  34,872
  36,671
  38,560
  40,544
  42,626
  44,813
  47,108
  49,519
  52,049
  54,706
  57,496
  60,425
  63,501
  66,730
  70,121
  73,681
  77,419
  81,344
  85,464
  89,791
  94,335
  99,105
  104,114
Maintenance CAPEX, $m
  -20,542
  -21,589
  -22,688
  -23,841
  -25,050
  -26,319
  -27,651
  -29,048
  -30,515
  -32,053
  -33,668
  -35,364
  -37,143
  -39,011
  -40,971
  -43,029
  -45,189
  -47,457
  -49,838
  -52,337
  -54,961
  -57,716
  -60,608
  -63,644
  -66,832
  -70,179
  -73,693
  -77,383
  -81,256
  -85,323
New CAPEX, $m
  -10,475
  -10,989
  -11,528
  -12,094
  -12,690
  -13,315
  -13,972
  -14,663
  -15,389
  -16,151
  -16,952
  -17,793
  -18,676
  -19,604
  -20,579
  -21,603
  -22,678
  -23,808
  -24,994
  -26,239
  -27,547
  -28,921
  -30,364
  -31,879
  -33,469
  -35,140
  -36,894
  -38,736
  -40,671
  -42,702
Cash from investing activities, $m
  -31,017
  -32,578
  -34,216
  -35,935
  -37,740
  -39,634
  -41,623
  -43,711
  -45,904
  -48,204
  -50,620
  -53,157
  -55,819
  -58,615
  -61,550
  -64,632
  -67,867
  -71,265
  -74,832
  -78,576
  -82,508
  -86,637
  -90,972
  -95,523
  -100,301
  -105,319
  -110,587
  -116,119
  -121,927
  -128,025
Free cash flow, $m
  -7,423
  -6,844
  -7,138
  -7,446
  -7,770
  -8,109
  -8,466
  -8,840
  -9,232
  -9,644
  -10,076
  -10,530
  -11,007
  -11,507
  -12,032
  -12,583
  -13,161
  -13,769
  -14,406
  -15,076
  -15,778
  -16,516
  -17,291
  -18,104
  -18,958
  -19,855
  -20,796
  -21,784
  -22,822
  -23,911
Issuance/(repayment) of debt, $m
  -8,507
  7,792
  8,175
  8,576
  8,998
  9,442
  9,908
  10,398
  10,912
  11,453
  12,021
  12,617
  13,244
  13,902
  14,593
  15,319
  16,082
  16,882
  17,723
  18,607
  19,534
  20,508
  21,531
  22,606
  23,734
  24,918
  26,162
  27,468
  28,840
  30,280
Issuance/(repurchase) of shares, $m
  24,633
  7,057
  7,362
  7,681
  8,016
  8,368
  8,737
  9,125
  9,531
  9,958
  10,406
  10,876
  11,370
  11,888
  12,432
  13,003
  13,602
  14,231
  14,892
  15,586
  16,314
  17,078
  17,881
  18,724
  19,609
  20,538
  21,513
  22,537
  23,612
  24,741
Cash from financing (excl. dividends), $m  
  16,126
  14,849
  15,537
  16,257
  17,014
  17,810
  18,645
  19,523
  20,443
  21,411
  22,427
  23,493
  24,614
  25,790
  27,025
  28,322
  29,684
  31,113
  32,615
  34,193
  35,848
  37,586
  39,412
  41,330
  43,343
  45,456
  47,675
  50,005
  52,452
  55,021
Total cash flow (excl. dividends), $m
  8,703
  8,006
  8,399
  8,811
  9,245
  9,701
  10,180
  10,683
  11,211
  11,767
  12,350
  12,963
  13,607
  14,283
  14,993
  15,739
  16,522
  17,345
  18,209
  19,117
  20,070
  21,070
  22,121
  23,225
  24,384
  25,601
  26,879
  28,221
  29,631
  31,110
Retained Cash Flow (-), $m
  -24,633
  -7,057
  -7,362
  -7,681
  -8,016
  -8,368
  -8,737
  -9,125
  -9,531
  -9,958
  -10,406
  -10,876
  -11,370
  -11,888
  -12,432
  -13,003
  -13,602
  -14,231
  -14,892
  -15,586
  -16,314
  -17,078
  -17,881
  -18,724
  -19,609
  -20,538
  -21,513
  -22,537
  -23,612
  -24,741
Prev. year cash balance distribution, $m
  820
  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
  163
  171
  180
  189
  199
  209
  219
  230
  242
  254
  267
  281
  295
  310
  325
  341
  359
  377
  395
  415
  436
  458
  481
  505
  530
  557
  585
  614
  645
  677
Cash available for distribution, $m
  -15,110
  949
  1,037
  1,130
  1,229
  1,333
  1,442
  1,558
  1,680
  1,809
  1,944
  2,087
  2,237
  2,395
  2,561
  2,736
  2,920
  3,114
  3,317
  3,531
  3,756
  3,992
  4,240
  4,501
  4,776
  5,064
  5,366
  5,684
  6,018
  6,369
Discount rate, %
  15.40
  16.17
  16.98
  17.83
  18.72
  19.65
  20.64
  21.67
  22.75
  23.89
  25.08
  26.34
  27.66
  29.04
  30.49
  32.02
  33.62
  35.30
  37.06
  38.92
  40.86
  42.90
  45.05
  47.30
  49.67
  52.15
  54.76
  57.50
  60.37
  63.39
PV of cash for distribution, $m
  -13,094
  703
  648
  586
  521
  454
  388
  324
  266
  212
  166
  126
  94
  67
  47
  32
  21
  13
  8
  5
  3
  2
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  35.3
  25.0
  17.8
  12.6
  9.0
  6.4
  4.6
  3.3
  2.4
  1.7
  1.2
  0.9
  0.6
  0.5
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

SunTrust Banks, Inc. is a provider of financial services. The Company's principal subsidiary is SunTrust Bank (the Bank). The Company's business segments include Consumer Banking and Private Wealth Management, Wholesale Banking, Mortgage Banking and Corporate Other. As of December 31, 2016, the Consumer Banking and Private Wealth Management segment consisted of three primary businesses: Consumer Banking, Consumer Lending and Private Wealth Management. The Wholesale Banking segment includes the operations of the Corporate and investment banking (CIB), Commercial and Business Banking, Commercial Real Estate, and Treasury and Payment Solutions businesses. The Mortgage Banking segment offers residential mortgage products nationally through its retail and correspondent channels, the Internet (www.suntrust.com) and by telephone. The Bank provides clients with a selection of full-, self- and assisted-service channels, including branch, call center, Teller Connect machines, mobile and tablet.

FINANCIAL RATIOS  of  SunTrust Banks (STI)

Valuation Ratios
P/E Ratio 19.1
Price to Sales 0
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow -52.7
Price to Free Cash Flow -31.6
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 49.8%
Cap. Spend. - 3 Yr. Gr. Rate 17.8%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 69.9%
Total Debt to Equity 69.9%
Interest Coverage 6
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 1.2%
Return On Total Capital 4.9%
Ret/ On T. Cap. - 3 Yr. Avg. 4.8%
Return On Equity 8%
Return On Equity - 3 Yr. Avg. 8.1%
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 29.9%
Eff/ Tax Rate - 3 Yr. Avg. 26.6%
Payout Ratio 30%

STI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the STI stock intrinsic value calculation we used $8578 million for the last fiscal year's total revenue generated by SunTrust Banks. The default revenue input number comes from 2017 income statement of SunTrust Banks. 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 STI stock valuation model: a) initial revenue growth rate of 5.1% 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 15.4%, whose default value for STI is calculated based on our internal credit rating of SunTrust Banks, 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 SunTrust Banks.
    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 STI stock the variable cost ratio is equal to 67%.

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 STI 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 SunTrust Banks.

Corporate tax rate of 27% is the nominal tax rate for SunTrust Banks. 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 STI stock is equal to 1.9%.

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 STI are equal to 2394.7%.

Life of production assets of 10 years is the average useful life of capital assets used in SunTrust Banks 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 STI is equal to -2013.1%. 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 SunTrust Banks - 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 481 million for SunTrust Banks 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 SunTrust Banks at the current share price and the inputted number of shares is $35.1 billion.

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COMPANY NEWS

▶ Downtown Orlando office building to be renovated as 60-year tenant says goodbye   [Aug-13-18 02:08PM  American City Business Journals]
▶ EXCLUSIVE: SunTrust launches Cincinnati wealth management unit   [Aug-09-18 11:04AM  American City Business Journals]
▶ SunTrusts Tampa Bay market president: Being a CFO made me a better banker   [Aug-03-18 10:35AM  American City Business Journals]
▶ New $125M downtown Orlando mixed-use tower to tap into office demand   [Aug-01-18 02:20PM  American City Business Journals]
▶ Financial Stocks Showing Relative Strength   [Jul-27-18 03:15PM  Investopedia]
▶ New medical center to debut next month in fast-growing Lake Nona   [02:00PM  American City Business Journals]
▶ PHOTOS: CBJ presents CFO of the Year awards to 'grittiest' of the C-suite   [Jul-26-18 11:54AM  American City Business Journals]
▶ Here's what's on the table for downtown Orlando's next mixed-use tower   [Jul-25-18 12:26PM  American City Business Journals]
▶ Expert: Expect these game-changing health care trends to hit Orlando   [11:31AM  American City Business Journals]
▶ Earnings Preview For SunTrust Banks   [Jul-19-18 03:36PM  Benzinga]
▶ Banking on change: SunTrusts new lease on downtown life   [08:27AM  American City Business Journals]
▶ 5 Major Bank Stocks Set to Outpace Earnings Estimates in Q2   [Jul-17-18 03:00PM  InvestorPlace]
▶ Construction update: An inside look at SunTrust's next Orlando home (PHOTOS)   [Jul-12-18 04:20PM  American City Business Journals]
▶ 3 Buys to Catapult Your Dividends to 8.6%   [Jul-10-18 12:38PM  InvestorPlace]
▶ Report: Atlanta one of world's top cities for banking offices   [05:00AM  American City Business Journals]
▶ Judge approves $4.7M settlement of 10-year ERISA lawsuit against SunTrust Banks   [Jul-03-18 04:40PM  American City Business Journals]
▶ Stress test projects $5.7B in loan losses at SunTrust in severe recession   [Jun-21-18 06:24PM  American City Business Journals]
▶ SunTrust Bank Increases Prime Rate   [Jun-13-18 06:00PM  PR Newswire]
▶ Confirmed: SunTrust to move its Orlando HQ to Church Street Plaza   [Jun-11-18 11:01AM  American City Business Journals]
▶ Southern Company CEO: Many immediate tax reform benefits were 'flash paper' (Video)   [Jun-08-18 11:39AM  American City Business Journals]
▶ 3 U.S. Stocks to Buy as International Growth Slows   [May-30-18 10:09AM  InvestorPlace]
▶ UGA, Atlanta United dominate 2018 sports awards nominations   [May-29-18 12:52PM  American City Business Journals]
▶ Top Florida bankers push for regulatory relief pays off   [May-23-18 07:03AM  American City Business Journals]
▶ Triad corporation files to issue $65 million in stock   [May-18-18 05:03PM  American City Business Journals]
▶ These are the banks duking it out for customers in Tampa   [02:27PM  American City Business Journals]
▶ Mortgage Lenders Targeting Doctors for New Home Loans   [May-07-18 05:45PM  Investopedia]
▶ Growth plans: Both big and small banks set to expand locally   [Apr-26-18 11:21AM  American City Business Journals]
▶ Closing Bell: LIVE MARKETS BLOG   [Apr-20-18 04:12PM  TheStreet.com]
▶ What you need to know in markets on Friday   [Apr-19-18 06:20PM  Yahoo Finance]
▶ SunTrust CEO: 'We couldn't be more bullish' on South Florida   [Apr-17-18 01:11PM  American City Business Journals]
▶ Why one Tampa banker backs a rollback of Dodd-Frank   [06:28AM  American City Business Journals]
▶ SunTrust to move out of downtown's tallest skyscraper?   [Apr-13-18 12:49PM  American City Business Journals]
▶ SunTrust to close Charlotte branch next week   [06:40AM  American City Business Journals]
▶ SunTrust Introduces Financial Confidence Index   [Apr-10-18 09:00AM  PR Newswire]
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