DCF Tool

AVY

Avery Dennison Corp. – Paper Bag and Coated and Treated Paper Manufacturing
Avery Dennison is a global materials science company specializing in the design and manufacture of a wide variety of labeling and functional materials. The company's products, which are used in nearly every major industry, include pressure-sensitive materials for labels and graphic applications; tapes and other bonding solutions for industrial, medical, and retail applications; tags, labels and embellishments for apparel; and radio frequency identification (RFID) solutions serving retail apparel and other markets. Headquartered in Glendale, California, the company employs more than 32,000 employees in more than 50 countries. Reported sales in 2020 were $7.0 billion.
Analysis Results
Intrinsic Value $297.71
Latest Price $164.50
Relative Value 45% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 13.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 13.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.928 0.865
2023 1.06 0.917
2024 1.2 0.971
2025 1.37 1.03
2026 1.55 1.09
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 29.7 billion. This corresponds to a present value of 19.5 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 4.87 billion. Adding in the terminal value gives a total present value of 24.3 billion.

There are presently 81.7 million outstanding shares, so the intrinsic value per share is 297.71.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,734,600,000
Current Cash 162,700,000
Current Liabilities 2,547,900,000
Current Debt 318,800,000
Non-Cash Working Capital (NCWC) 342,800,000
Change in NCWC 72,800,000
EBIT 1,060,400,000
Tax Provision 248,600,000
Depreciation and Amortization 244,100,000
Capital Expenditure -272,100,000
Unlevered Free Cash Flow 838,571,659
Current Assets 2,416,200,000
Current Cash 284,900,000
Current Liabilities 1,926,000,000
Current Debt 64,700,000
Non-Cash Working Capital (NCWC) 270,000,000
Change in NCWC 26,900,000
EBIT 859,100,000
Tax Provision 177,700,000
Depreciation and Amortization 205,300,000
Capital Expenditure -218,600,000
Unlevered Free Cash Flow 664,600,122
Current Assets 2,340,600,000
Current Cash 283,900,000
Current Liabilities 2,253,800,000
Current Debt 440,200,000
Non-Cash Working Capital (NCWC) 243,100,000
Change in NCWC 2,600,000
EBIT 821,100,000
Tax Provision -56,700,000
Depreciation and Amortization 179,000,000
Capital Expenditure -257,200,000
Unlevered Free Cash Flow 745,500,000
Current Assets 2,298,000,000
Current Cash 258,100,000
Current Liabilities 1,994,000,000
Current Debt 194,600,000
Non-Cash Working Capital (NCWC) 240,500,000
Change in NCWC -44,300,000
EBIT 786,000,000
Tax Provision 85,400,000
Depreciation and Amortization 181,000,000
Capital Expenditure -256,600,000
Unlevered Free Cash Flow 544,673,806
Current Assets 2,237,900,000
Current Cash 246,700,000
Current Liabilities 1,971,800,000
Current Debt 265,400,000
Non-Cash Working Capital (NCWC) 284,800,000
Change in NCWC 17,900,000
EBIT 689,000,000
Tax Provision 307,700,000
Depreciation and Amortization 178,700,000
Capital Expenditure -226,100,000
Unlevered Free Cash Flow 299,864,206
Current Assets 1,904,800,000
Current Cash 212,700,000
Current Liabilities 2,004,300,000
Current Debt 579,100,000
Non-Cash Working Capital (NCWC) 266,900,000
Change in NCWC 31,700,000
EBIT 602,200,000
Tax Provision 156,400,000
Depreciation and Amortization 180,100,000
Capital Expenditure -206,600,000
Unlevered Free Cash Flow 409,990,484
Current Assets 1,775,400,000
Current Cash 176,400,000
Current Liabilities 1,459,100,000
Current Debt 95,300,000
Non-Cash Working Capital (NCWC) 235,200,000
Change in NCWC -48,500,000
EBIT 537,700,000
Tax Provision 134,500,000
Depreciation and Amortization 188,300,000
Capital Expenditure -151,500,000
Unlevered Free Cash Flow 349,133,651
Current Assets 1,921,300,000
Current Cash 244,100,000
Current Liabilities 1,597,800,000
Current Debt 204,300,000
Non-Cash Working Capital (NCWC) 283,700,000
Change in NCWC 38,100,000
EBIT 495,900,000
Tax Provision 113,300,000
Depreciation and Amortization 201,600,000
Capital Expenditure -175,000,000
Unlevered Free Cash Flow 406,413,748
Current Assets 2,091,800,000
Current Cash 369,000,000
Current Liabilities 1,554,100,000
Current Debt 76,900,000
Non-Cash Working Capital (NCWC) 245,600,000
Change in NCWC -358,700,000
EBIT 458,700,000
Tax Provision 118,800,000
Depreciation and Amortization 204,600,000
Capital Expenditure -181,400,000
Unlevered Free Cash Flow -26,878,656
Current Assets 2,411,700,000
Current Cash 253,100,000
Current Liabilities 2,074,500,000
Current Debt 520,200,000
Non-Cash Working Capital (NCWC) 604,300,000
Change in NCWC -4,100,000
EBIT 397,700,000
Tax Provision 86,400,000
Depreciation and Amortization 220,600,000
Capital Expenditure -154,100,000
Unlevered Free Cash Flow 325,613,581

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