We have previously looked at Fisher & Paykel Healthcare ($FPH.NZ). Fisher & Paykel Appliances (FPA.NZ) is the original appliances side of the business. The current share price is NZ$1.33 - just above the 52-week low. How is this in relation to the intrinsic value of the company’s shares?

Valuecruncher valuation model of $FPA.NZ with interactive assumptions

Valuecruncher produces a valuation of NZ$1.33 for $FPA.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 on the current share price of NZ$1.33.

Assumptions

• Revenue: Reuters aggregates seven analysts covering $FPA.NZ and this produces mean estimates of 2009 and 2010 revenues of NZ$1.445 billion and NZ$1.549 billion respectively. For our analysis we have used NZ$1.425 billion in 2009, NZ$1.525 billion in 2010 and NZ$1.60 billion in 2011.
• Profitability: We have used an EBITDA margin of 10% in 2009 rising to 11% in 2011. Reuters has $FPA.NZ‘s EBITD margin at 10.3% last year and an average of 12.8% over the last five-years.
• Capital Expenditure: We have assumed capital expenditures of NZ$85.0 million in 2009 then NZ$65.0 million moving forward.
• Discount Rate: 9.5%. The PwC New Zealand cost of capital report has $FPA.NZ at a WACC of 9.3% with the wider NZ market at 9.5%.
• Terminal Growth Rate: 3.5%.

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

Play with our assumptions – what does your analysis say?

Disclosure: None