Calculating The Intrinsic Value Of Carlisle Companies Incorporated (NYSE:CSL)
Calculating The Intrinsic Value Of Carlisle Companies Incorporated (NYSE:CSL)
Key Insights
- Carlisle Companies' estimated fair value is US$332 based on 2 Stage Free Cash Flow to Equity
- Carlisle Companies' US$373 share price indicates it is trading at similar levels as its fair value estimate
- Our fair value estimate is 20% lower than Carlisle Companies' analyst price target of US$413
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Carlisle Companies Incorporated (NYSE:CSL) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Believe it or not, it's not too difficult to follow, as you'll see from our example!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
Crunching The Numbers
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) forecast
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | US$746.2m | US$875.3m | US$976.0m | US$974.5m | US$980.1m | US$990.8m | US$1.01b | US$1.02b | US$1.04b | US$1.06b |
Growth Rate Estimate Source | Analyst x2 | Analyst x3 | Analyst x1 | Est @ -0.16% | Est @ 0.58% | Est @ 1.09% | Est @ 1.45% | Est @ 1.70% | Est @ 1.88% | Est @ 2.00% |
Present Value ($, Millions) Discounted @ 7.8% | US$692 | US$754 | US$780 | US$722 | US$674 | US$632 | US$595 | US$562 | US$531 | US$502 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$6.4b
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 7.8%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$1.1b× (1 + 2.3%) ÷ (7.8%– 2.3%) = US$20b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$20b÷ ( 1 + 7.8%)10= US$9.4b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$16b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of US$373, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
The Assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Carlisle Companies as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.8%, which is based on a levered beta of 1.193. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
SWOT Analysis for Carlisle Companies
- Debt is well covered by earnings and cashflows.
- Dividends are covered by earnings and cash flows.
- Dividend information for CSL.
- Earnings declined over the past year.
- Dividend is low compared to the top 25% of dividend payers in the Building market.
- Expensive based on P/E ratio and estimated fair value.
- Annual earnings are forecast to grow for the next 2 years.
- Annual earnings are forecast to grow slower than the American market.
- What else are analysts forecasting for CSL?
Looking Ahead:
Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Carlisle Companies, we've compiled three relevant elements you should further examine:
- Risks: To that end, you should be aware of the 2 warning signs we've spotted with Carlisle Companies .
- Future Earnings: How does CSL's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!
PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
關鍵見解
- 根據兩階段股權自由現金流,卡萊爾公司的公允價值估計爲332美元
- 卡萊爾公司的373美元股價表明其交易價格與其公允價值估計相似
- 我們的公允價值估計比卡萊爾公司的分析師目標股價413美元低20%
今天,我們將簡單介紹一種估值方法,該方法通過預測卡萊爾公司未來現金流並將其折扣回今天的價值,來估計卡萊爾公司(紐約證券交易所代碼:CSL)作爲投資機會的吸引力。爲此,我們將利用折扣現金流 (DCF) 模型。信不信由你,這並不難理解,正如你將從我們的例子中看到的那樣!
我們普遍認爲,公司的價值是其未來將產生的所有現金的現值。但是,差價合約只是衆多估值指標中的一個,而且並非沒有缺陷。任何有興趣進一步了解內在價值的人都應該讀一讀 Simply Wall St 分析模型。
計算數字
我們使用的是兩階段增長模型,這只是意味着我們考慮了公司增長的兩個階段。在初始階段,公司的增長率可能更高,而第二階段通常被認爲具有穩定的增長率。首先,我們需要估計未來十年的現金流。在可能的情況下,我們會使用分析師的估計值,但是當這些估計值不可用時,我們會從最新的估計值或報告的價值中推斷出之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
差價合約就是關於未來一美元的價值低於今天一美元的概念,因此,這些未來現金流的總和將折現爲今天的價值:
10 年自由現金流 (FCF) 預測
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | 746.2 億美元 | 8.753 億美元 | 976.0 億美元 | 974.5 億美元 | 980.1 億美元 | 990.8 億美元 | 101 億美元 | 10.2 億美元 | 10.4 億美元 | 10.6 億美元 |
增長率估算來源 | 分析師 x2 | 分析師 x3 | 分析師 x1 | Est @ -0.16% | Est @ 0.58% | 東部標準時間 @ 1.09% | Est @ 1.45% | Est @ 1.70% | Est @ 1.88% | Est @ 2.00% |
現值(美元,百萬)折扣 @ 7.8% | 692 美元 | 754 美元 | 780 美元 | 722 美元 | 674 美元 | 632 美元 | 595 美元 | 562 美元 | 531 美元 | 502 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
十年期現金流(PVCF)的現值 = 64 億美元
我們現在需要計算終值,該值涵蓋了這十年之後的所有未來現金流。戈登增長公式用於計算終值,其未來年增長率等於10年期國債收益率2.3%的5年平均水平。我們將終端現金流折現爲今天的價值,權益成本爲7.8%。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 11億美元× (1 + 2.3%) ÷ (7.8% — 2.3%) = 200億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 200b美元÷ (1 + 7.8%)10= 94 億美元
總價值是未來十年的現金流總額加上貼現的終端價值,由此得出總權益價值,在本例中爲160億美元。最後一步是將股票價值除以已發行股票的數量。相對於目前的373美元股價,該公司在撰寫本文時看似公允價值。但請記住,這只是一個近似的估值,就像任何複雜的公式一樣,垃圾進出。
假設
現在,貼現現金流的最重要輸入是貼現率,當然還有實際現金流。你不必同意這些輸入,我建議你自己重做計算然後試一試。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將卡萊爾公司視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了7.8%,這是基於1.193的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
卡萊爾公司的SWOT分析
- 收益和現金流足以彌補債務。
- 股息由收益和現金流支付。
- CSL 的股息信息。
- 在過去的一年中,收益有所下降。
- 與建築市場前25%的股息支付者相比,股息很低。
- 根據市盈率和估計的公允價值,價格昂貴。
- 預計未來兩年的年收入將增長。
- 預計年收益的增長速度將低於美國市場。
- 分析師對CSL還有什麼預測?
展望未來:
儘管公司的估值很重要,但它不應該是你在研究公司時唯一考慮的指標。使用DCF模型不可能獲得萬無一失的估值。相反,它應該被視爲 “需要哪些假設才能低估/高估這隻股票的價值?” 的指南例如,公司權益成本或無風險利率的變化會對估值產生重大影響。對於卡萊爾公司,我們整理了三個值得進一步研究的相關要素:
- 風險:爲此,您應該注意我們在卡萊爾公司發現的兩個警告信號。
- 未來收益:與同行和整個市場相比,CSL的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他穩健的業務:低債務、高股本回報率和良好的過去表現是強大業務的基礎。爲什麼不瀏覽我們具有堅實業務基礎的股票互動清單,看看是否還有其他你可能沒有考慮過的公司!
PS。Simply Wall St每天都會更新每隻美國股票的差價合約計算結果,因此,如果您想找到任何其他股票的內在價值,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
風險及免責聲明
- 分享到weixin
- 分享到qq
- 分享到facebook
- 分享到twitter
- 分享到微博
- 粘贴板
使用瀏覽器的分享功能,分享給你的好友吧