Proctor & Gamble ($PG) is trading close to a 52-week low at US$58.76.  We decided to run some numbers around the branded consumer goods company.

Valuecruncher valuation model of $PG with interactive assumptions

Valuecruncher produces a valuation of US$72.92 for $PG. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 24.1% above the current share price of US$58.76.

Assumptions

• Revenue: Reuters aggregates 13analysts covering $PG and these analysts have mean estimates of  2009 revenues of US$88.4 billion. For our analysis we have used US$87.0 billion in 2009, US$91.0 billion in 2010 and US$94.5 billion in 2011.
• Profitability: We have used an EBITDA margin of 23.0% in 2009 rising to 24.0% in 2011. Reuters has $PG‘s EBITD margin at 24.5% last year and 23.5% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of US$3.5 billion in 2009 and 2010 rising to US$3.75 billion in 2011 and US$3.5 billion beyond that.
• Discount Rate: 8.0%.
• Terminal Growth Rate: 3.0%.

Our analysis incorporates the cash and debt the $PG balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

Fletcher Building (FBU.NZ) is New Zealand’s second largest company by market capitalisation. The company is a building materials manufacturer and distributor. FBU.NZ is trading at close to a 52-week low of NZ$6.20. Time to run some numbers.

Valuecruncher valuation model of FBU.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$7.24 for FBU.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 16.8% above the current share price of NZ$6.20.

Assumptions

• Revenue: Reuters aggregates nine analysts covering FBU.NZ and these analysts have mean estimates of 2009 revenues of NZ$7.1 billion. For our analysis we have used NZ$7.0 billion in 2009, NZ$7.25 billion in 2010 and NZ$7.5 billion in 2011.
• Profitability: We have used an EBITDA margin of 12% in 2009 and 2010 rising to 13% in 2011. Reuters has FBU.NZ‘s EBITD margin at 13.02% last year and 14.15% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of NZ$250.0 million flat moving forward.
• Discount Rate: 12.0%. The PwC New Zealand cost of capital report has FBU.NZ at a WACC of 13.4% with the wider NZ market at 9.5%. We feel that 13.4% is too high. We believe there is an argument for a discount rate anywhere in the 9-12% range for FBU.NZ.
• Terminal Growth Rate: 3.0%. The New Zealand economy has grown at an average rate of 2.6% over the last five-years. We see FBU.NZ growing broadly in-line with this moving forward.

Our analysis incorporates the cash and debt the FBU.NZ balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

At Valuecruncher we have looked at $IBM several times.  Our valuations have been in the US$128 – US$141 range.  $IBM is currently trading at US$88.86 – when we looked previously $IBM was trading at US$126.52 and US$119.42.  We thought that it was time to revisit our valuation.

Valuecruncher valuation model of $IBM with interactive assumptions

Valuecruncher produces a valuation of US$130.55 for $IBM. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 46.9% above the current share price of US$88.86.

Assumptions

• Revenue: Reuters aggregates 17 analysts covering $IBM and these analysts have mean estimates of 2008 and 2009 revenues of US$106.7 billion and US$111.7 billion respectively. For our analysis we have used US$105.0 billion in 2008, US$106.5 billion in 2009 and US$110.0 billion in 2010.
• Profitability: We have used an EBITDA margin of 20% flat to 2010. Reuters has $IBM‘s EBITD margin at 20.26% last year.
• Capital Expenditure: We have assumed capital expenditures of US$5.0 billion in 2008 and 2009 rising to US$5.5 billion in 2010 and beyond.
• Discount Rate: 10.5%.
• Terminal Growth Rate: 3.0%.

Our analysis incorporates the cash and debt the $IBM balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

PPL.NZ has had tough ride over the last year. The share price has dropped from NZ$3.08 to as low as NZ$1.05. Currently PPL is trading at NZ$1.12. We thought it was time to put some numbers around PPL.NZ.

Valuecruncher valuation model of PPL.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$1.11 for PPL.NZ. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is right at the current share price of NZ$1.12.

Assumptions

• Revenue: Reuters aggregates seven analysts covering PPL.NZ and these analysts have mean estimates of 2009 revenues of NZ$441 million. For our analysis we have used NZ$425 million in 2009, NZ$450 million in 2010 and NZ$485 million in 2011.

• Profitability: We have used an EBITDA margin of 12% in 2009 rising to 13% in 2011. Reuters has PPL.NZ‘s EBITD margin at 10.91% last year with a five-year average of 14.76%.

• Capital Expenditure: We have assumed capital expenditures of NZ$18 million in 2009 rising to NZ$35 million in 2011 and then NZ$30 million beyond that.

• Discount Rate: 11.0%. The PwC New Zealand cost of capital report has PPL.NZ at a WACC of 13.5% with the wider NZ market at 9.5%. We feel that 13.5% is too high.

• Terminal Growth Rate: 4.5%.

Our analysis incorporates the cash and debt the PPL.NZ balance sheet – Valuecruncher calculates a net debt number.

Disclosure: None

$YHOO has had a horror run since rebuffing Microsoft’s ($MSFT) takeover offer at US$31 a share.  Today $YHOO closed at US$12.86 – just above 40% of the $MSFT offer (from 31 January 2008).

Valuecruncher valuation model of $YHOO with interactive assumptions

Valuecruncher produces a valuation of US$17.62 for $YHOO.  This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price.  This valuation is 37% above the current share price of US$12.86.  This valuation of $YHOO focuses on the core business – we have ignored the investments $YHOO holds in Alibaba, Yahoo Japan and G-Market.

Assumptions

Revenue: Reuters aggregates 25 analysts covering $YHOO and these analysts have mean estimates of 2008 and 2009 revenues of US$5.69 and US$6.42 billion respectively.  For our analysis we have used US$5.50 billion in 2008, US$6.15 billion in 2009 and US$6.75 billion in 2010.

Profitability: We have used an EBITDA margin of 33% flat to 2010.

Capital Expenditure: We have assumed capital expenditures of US$700 million in 2008, US$800 million in 2009 and 2010 and then US$750 million beyond that.

Discount Rate: 11.0%.

Terminal Growth Rate: 4.5%.

Our analysis incorporates the cash the $YHOO balance sheet – Valuecruncher calculates a net debt number.

Disclosure: None

On Friday Australian steelmaker OneSteel terminated their offer for the 49.73% of Steel & Tube Holdings (STU.NZ) that did not already own.  The NZ$4.00 a share offer was withdrawn citing the current increased market volatility.  The withdrawal of the offer has dropped the STU.NZ share price NZ$0.80 to NZ$2.80.  We decided to have a look at STU.NZ with the Valuecruncher interactive tool to place an estimate on the intrinsic value of the company using a discounted cash flow valuation.  The objective was to look at the current share price and to determine if the OneSteel offer was fair.

Valuecruncher valuation model of STU.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$3.40 for STU.NZ.  This is a current valuation (an estimate of intrinsic value) not a target price.  This valuation is 21.4% above the current share price of NZ$2.80 and 15.0% below the OneSteel offer price of NZ$4.00.

Assumptions

In 2008 (June balance date) STU.NZ had revenues of NZ$503.8 million and an EBITD margin (profits) of 9% (with a five-year average of 12%).  Reuters aggregates seven analysts covering STU.NZ and these have mean estimates of 2009 revenues of NZ$504 million.  For this analysis we have used revenues of NZ$500 million in 2009, NZ$525 million in 2010 and NZ$550million in 2011.  We have forecast EBITDA margins flat at 10% to 2011.  We have estimated capital expenditure flat at NZ$8.5 million moving forward.  All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation.

Other Model Assumptions:

Discount Rate: 11%.  PwC in their New Zealand cost of capital report calculates STU.NZ WACC at 11.4%.

Terminal Growth Rate: 3.0%.  The New Zealand economy has grown at an average rate of 2.6% over the last five-years.  We see STU.NZ growing broadly in-line moving forward.

Our analysis incorporates the cash and debt on the STU.NZ balance sheet – Valuecruncher calculates a net debt number.

Based on our analysis and assumptions the current share price looks a discount to intrinsic value.  In our view the OneSteel offer at NZ$4.00 a share looks very fair.  STU.NZ shareholders should be hoping that the offer is revived in the future.  Play with our assumptions – what does your analysis say?

Disclosure: None

Valuecruncher has a database of over 1,000 companies on major international exchanges. You can explore, create and share valuations for any of these companies.

Contact Energy (CEN.NZ) is a New Zealand electricity generating and retailing company.  CEN.NZ is New Zealand’s second largest listed company (by market capitalisation).  CEN.NZ is currently undertaking a NZ$3 billion capital expenditure programme.  We decided to have a look at CEN.NZ with the Valuecruncher interactive tool to place an estimate on the intrinsic value of the company using a discounted cash flow valuation.

Valuecruncher valuation model of CEN.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$6.93 for CEN.NZ.  This is a current valuation (an estimate of intrinsic value) not a target price.  This valuation is 1.84% below the current share price of NZ$7.07.

Assumptions

In 2008 (June balance date) CEN.NZ had revenues of NZ$2.76 billion and an EBITD margin (profits) of 20.2%.  Reuters aggregates seven analysts covering CEN.NZ and these have mean estimates of 2009 revenues of NZ$2.487 billion.  For this analysis we have used revenues of NZ$2.485 billion in 2009, NZ$2.565 billion in 2010 and NZ$2.760 billion in 2011.  We have forecast EBITDA margins rising from 24% in 2009 to 26% in 2011.  We have estimated capital expenditure of NZ$600 million in 2009 and NZ$700 million in 2010 then dropping to NZ$475 million in 2011 and NZ$250 million moving forward.  All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation.

Other Model Assumptions:

Discount Rate: 10%.  PwC in their New Zealand cost of capital report calculates CEN.NZ WACC at 10.4%.

Terminal Growth Rate: 4.5%.  The New Zealand economy has grown at an average rate of 2.6% over the last five-years.  We see CEN.NZ growing more quickly than the New Zealand economy moving forward.

Our analysis incorporates the cash and debt on the CEN.NZ balance sheet – Valuecruncher calculates a net debt number.

Based on our analysis and assumptions the current share price looks a slight premium to intrinsic value.  Play with our assumptions – what does your analysis say?

Disclosure: None

Valuecruncher has a database of over 1,000 companies on major international exchanges. You can explore, create and share valuations for any of these companies.

If you have not seen this – it is a must read.

Warren Buffett in an Op-Ed in the New York Times – valuation of US stocks today

Amazing.

New Zealand’s sharemarket operator NZX Limited (NZX.NZ) closed today at NZ$6.00 – just above the 52-week low of NZ$5.83.  We decided to have a look at NZX.NZ with the Valuecruncher interactive tool to place an estimate on the intrinsic value of the company using a discounted cash flow valuation.

Valuecruncher valuation model of NZX.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$6.77 for NZX.NZ.  This is a current valuation (an estimate of intrinsic value) not a target price.  This valuation is 12.8% above the current share price of NZ$6.00.

Assumptions

In 2007 (31 December balance date) NZX.NZ had revenues of NZ$31.5 million and an EBITD margin (profits) of 49.9%.  Reuters aggregates three analysts covering NZX.NZ and these have mean estimates of 2008 and 2009 revenues of NZ$32.5 and NZ$36.1 million respectively.  For this analysis we have used revenues of NZ$32.5 million in 2008, NZ$36.0 million in 2009 and NZ$39.0 million in 2010.  We have forecast EBITDA margins flat at 48.0% to 2010.  We have estimated capital expenditure of NZ$4.0 million in 2008 and then NZ$3.0 million moving forward.  All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation.

Other Model Assumptions:

Discount Rate: 9.5%.  PwC in their New Zealand cost of capital report calculates NZX.NZ WACC at 9.6%.

Terminal Growth Rate: 4.25%.  The New Zealand economy has grown at an average rate of 2.6% over the last five-years.  We see NZX.NZ growing more quickly than the New Zealand economy moving forward due to the growth options available to the company – primarily around data.

Our analysis incorporates the cash and debt on the NZX.NZ balance sheet – Valuecruncher calculates a net debt number.

Based on our analysis and assumptions the current share price looks a slight discount to intrinsic value.  Play with our assumptions – what does your analysis say?

Disclosure: None

Valuecruncher has a database of over 1,000 companies on major international exchanges. You can explore, create and share valuations for any of these companies.

$GOOG announced stronger than expected third quarter financial results today.  This resulted in a US$13.85 (4.08%) lift in the share price to close at US$353.02 – and more in after-hours trading.  This is still less than half the 52-week high of US$747.24.  This is a good result for $GOOG in volatile market conditions.  We decided to have a look at $GOOG with the Valuecruncher interactive tool to place an estimate on the intrinsic value of the company using a discounted cash flow valuation.

Valuecruncher valuation model of $GOOG with interactive assumptions

Valuecruncher produces a valuation of US$416.73 for $GOOG.  This is a current valuation (an estimate of intrinsic value) not a target price.  This valuation is 18.0% above the current share price of US$353.02.

Assumptions

In 2007 $GOOG had annual revenues of US$16.6 billion and an EBITDA margin (profits) of 40.7%.  Reuters aggregates 26 analysts covering $GOOG and these have mean estimates of 2009 and 2010 revenues of US$22.4 and US$27.9 billion respectively.  For our analysis we have used US$22.0 billion in 2008, US$27.0 billion in 2009 and US$32.5 billion in 2010.  We have forecast EBITDA margins remaining flat at 40% to 2010.  We have estimated capital expenditure in 2008 at US$3.075 billion rising to US$3.75 billion in 2010 and at US$3.25 billion beyond that.  Capital expenditure dropped dramatically in quarter three to US$452 million from US$697 million the previous quarter.  We don’t believe that capital expenditure will remain at the current level (Q3).  All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation.

Other Model Assumptions:

Discount Rate: 11.0%.  We believe the discount rate is in the 9-11% range.  We have used the upper end of this range to reflect the uncertain market conditions that $GOOG signalled in the announcement.

Terminal Growth Rate: 6.0%.  The US economy grew at an average of 3.6% over the last five-years.  $GOOG showed that while growth is slowing there is still more to come.

Our analysis incorporates the cash the $GOOG balance sheet – Valuecruncher calculates a net debt number.

Based on our analysis and assumptions the current share price is at a discount to intrinsic value.  Play with our assumptions – what does your analysis say?

Disclosure: None

Valuecruncher has a database of over 1,000 companies on major international exchanges. You can explore, create and share valuations for any of these companies.