A Look At The Fair Value Of Boise Cascade Company (NYSE:BCC)
A Look At The Fair Value Of Boise Cascade Company (NYSE:BCC)
Key Insights
- Using the 2 Stage Free Cash Flow to Equity, Boise Cascade fair value estimate is US$152
- Boise Cascade's US$133 share price indicates it is trading at similar levels as its fair value estimate
- Analyst price target for BCC is US$151 which is similar to our fair value estimate
Does the April share price for Boise Cascade Company (NYSE:BCC) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by projecting its future cash flows and then discounting them to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
The Calculation
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) estimate
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | US$334.8m | US$379.7m | US$359.6m | US$349.5m | US$345.0m | US$344.3m | US$346.2m | US$349.9m | US$354.9m | US$360.9m |
Growth Rate Estimate Source | Analyst x4 | Analyst x4 | Analyst x2 | Est @ -2.81% | Est @ -1.28% | Est @ -0.21% | Est @ 0.54% | Est @ 1.07% | Est @ 1.43% | Est @ 1.69% |
Present Value ($, Millions) Discounted @ 7.4% | US$312 | US$329 | US$291 | US$263 | US$242 | US$225 | US$211 | US$198 | US$187 | US$177 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$2.4b
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.4%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$361m× (1 + 2.3%) ÷ (7.4%– 2.3%) = US$7.3b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$7.3b÷ ( 1 + 7.4%)10= US$3.6b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$6.0b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$133, the company appears about fair value at a 13% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Important Assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. 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 Boise Cascade 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 7.4%, which is based on a levered beta of 1.101. 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 Boise Cascade
- Debt is not viewed as a risk.
- Dividends are covered by earnings and cash flows.
- Dividend is in the top 25% of dividend payers in the market.
- Dividend information for BCC.
- Earnings declined over the past year.
- Annual earnings are forecast to grow for the next 3 years.
- Good value based on P/E ratio and estimated fair value.
- Annual earnings are forecast to grow slower than the American market.
- What else are analysts forecasting for BCC?
Moving On:
Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Boise Cascade, there are three fundamental items you should look at:
- Risks: For example, we've discovered 3 warning signs for Boise Cascade that you should be aware of before investing here.
- Future Earnings: How does BCC'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 High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
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
- 使用兩階段的股本自由現金流,博伊西Cascade的公允價值估計爲152美元
- 博伊西Cascade的133美元股價表明其交易價格與其公允價值估計相似
- BCC的分析師目標股價爲151美元,與我們的公允價值估計相似
博伊西喀斯喀特公司(紐約證券交易所代碼:BCC)4月份的股價是否反映了其真正價值?今天,我們將通過預測股票的未來現金流來估算股票的內在價值,然後將其折現爲今天的價值。折扣現金流(DCF)模型是我們將應用的工具。在你認爲自己無法理解之前,請繼續閱讀!實際上,它沒有你想象的那麼複雜。
公司可以在很多方面得到估值,因此我們要指出,DCF並不適合所有情況。如果您想了解有關折扣現金流的更多信息,可以在Simply Wall St分析模型中詳細了解此計算背後的理由。
計算結果
我們使用所謂的兩階段模型,這僅意味着公司的現金流有兩個不同的增長期。通常,第一階段是較高的增長階段,第二階段是較低的增長階段。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) 估計
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | 334.8 億美元 | 379.7 億美元 | 359.6 億美元 | 349.5 億美元 | 345.0 億美元 | 3.443 億美元 | 3.462 億美元 | 349.9 億美元 | 354.9 億美元 | 3.609 億美元 |
增長率估算來源 | 分析師 x4 | 分析師 x4 | 分析師 x2 | Est @ -2.81% | Est @ -1.28% | Est @ -0.21% | Est @ 0.54% | 東部標準時間 @ 1.07% | Est @ 1.43% | 美國東部時間 @ 1.69% |
現值(美元,百萬)折扣 @ 7.4% | 312 美元 | 329 美元 | 291 美元 | 263 美元 | 242 美元 | 225 美元 | 211 美元 | 198 美元 | 187 美元 | 177 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
10年期現金流(PVCF)的現值 = 24億美元
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。出於多種原因,使用的增長率非常保守,不能超過一個國家的GDP增長。在這種情況下,我們使用10年期國債收益率的5年平均值(2.3%)來估計未來的增長。與10年 “增長” 期一樣,我們使用7.4%的股本成本將未來的現金流折現爲今天的價值。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 3.61億美元× (1 + 2.3%) ÷ (7.4% — 2.3%) = 73億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 73億美元÷ (1 + 7.4%)10= 36 億美元
因此,總價值或權益價值是未來現金流現值的總和,在本例中爲60億美元。在最後一步中,我們將股票價值除以已發行股票的數量。相對於目前的133美元的股價,該公司的公允價值似乎比目前的股價折扣了13%。但是,估值是不精確的工具,就像望遠鏡一樣——移動幾度,最終進入另一個星系。請記住這一點。
重要假設
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。投資的一部分是自己對公司未來業績的評估,因此請自己嘗試計算並檢查自己的假設。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。鑑於我們將博伊西·喀斯喀特視爲潛在股東,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7.4%,這是基於1.101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。
博伊西喀特的 SWOT 分析
- 債務不被視爲風險。
- 股息由收益和現金流支付。
- 股息在市場上名列前25%的股息支付者。
- BCC 的股息信息。
- 在過去的一年中,收益有所下降。
- 預計未來三年的年收入將增長。
- 根據市盈率和估計的公允價值,物有所值。
- 預計年收益的增長速度將低於美國市場。
- 分析師對BCC還有什麼預測?
繼續前進:
儘管公司的估值很重要,但它只是公司需要評估的衆多因素之一。使用DCF模型不可能獲得萬無一失的估值。最好你運用不同的案例和假設,看看它們將如何影響公司的估值。例如,如果稍微調整終值增長率,則可能會極大地改變整體結果。對於 Boise Cascade 來說,你應該考慮三個基本項目:
- 風險:例如,我們發現了博伊西Cascade的3個警告信號,在這裏投資之前,您應該注意這些信號。
- 未來收益:與同行和整個市場相比,BCC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,更深入地了解未來幾年的分析師共識數字。
- 其他高質量的替代品:你喜歡一個優秀的全能選手嗎?瀏覽我們的高品質股票互動清單,了解您可能還會錯過什麼!
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。
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