DCF Tool

HRL

Hormel Foods Corp. – Animal (except Poultry) Slaughtering
hormel foods is a fortune 500, multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. the company leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring quality, value-added brands to the global marketplace. the company enjoys a strong reputation among consumers, retail grocers, foodservice and industrial customers for products highly regarded for quality, taste, nutrition, convenience and value. this diverse portfolio of products includes hams, bacon, sausages, franks, canned luncheon meats, stews, chilis, hash, meat spreads, shelf-stable microwaveable entrees and salsas.
Analysis Results
Intrinsic Value $76.71
Latest Price $33.93
Relative Value 56% 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 7.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 7.5%, 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)
2024 1.23 1.17
2025 1.32 1.19
2026 1.42 1.22
2027 1.53 1.24
2028 1.64 1.26
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 49.3 billion. This corresponds to a present value of 35.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.08 billion. Adding in the terminal value gives a total present value of 42.0 billion.

There are presently 548.0 million outstanding shares, so the intrinsic value per share is 76.71.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 3,297,249,000
Current Cash 753,196,000
Current Liabilities 2,311,777,000
Current Debt 950,529,000
Non-Cash Working Capital (NCWC) 1,182,805,000
Change in NCWC 8,405,000
EBIT 1,100,428,000
Tax Provision 220,552,000
Depreciation and Amortization 253,311,000
Capital Expenditure -270,211,000
Unlevered Free Cash Flow 852,457,379
Current Assets 3,637,126,000
Current Cash 998,256,000
Current Liabilities 1,473,266,000
Current Debt 8,796,000
Non-Cash Working Capital (NCWC) 1,174,400,000
Change in NCWC 268,174,000
EBIT 1,312,606,000
Tax Provision 277,877,000
Depreciation and Amortization 262,753,000
Capital Expenditure -278,918,000
Unlevered Free Cash Flow 1,279,236,577
Current Assets 2,947,816,000
Current Cash 634,692,000
Current Liabilities 1,415,654,000
Current Debt 8,756,000
Non-Cash Working Capital (NCWC) 906,226,000
Change in NCWC 304,083,000
EBIT 1,122,598,000
Tax Provision 217,029,000
Depreciation and Amortization 228,406,000
Capital Expenditure -232,416,000
Unlevered Free Cash Flow 1,206,330,183
Current Assets 3,579,064,000
Current Cash 1,731,647,000
Current Liabilities 1,503,965,000
Current Debt 258,691,000
Non-Cash Working Capital (NCWC) 602,143,000
Change in NCWC 33,416,000
EBIT 1,100,221,000
Tax Provision 206,393,000
Depreciation and Amortization 205,781,000
Capital Expenditure -367,501,000
Unlevered Free Cash Flow 768,213,640
Current Assets 2,361,413,000
Current Cash 687,637,000
Current Liabilities 1,105,049,000
Current Debt 0
Non-Cash Working Capital (NCWC) 568,727,000
Change in NCWC 116,677,000
EBIT 1,196,265,000
Tax Provision 230,567,000
Depreciation and Amortization 165,209,000
Capital Expenditure -293,838,000
Unlevered Free Cash Flow 956,309,517
Current Assets 2,050,100,000
Current Cash 459,136,000
Current Liabilities 1,138,914,000
Current Debt 0
Non-Cash Working Capital (NCWC) 452,050,000
Change in NCWC -72,139,000
EBIT 1,216,200,000
Tax Provision 168,702,000
Depreciation and Amortization 161,858,000
Capital Expenditure -389,607,000
Unlevered Free Cash Flow 742,623,562
Current Assets 2,026,523,000
Current Cash 444,122,000
Current Liabilities 1,058,212,000
Current Debt 0
Non-Cash Working Capital (NCWC) 524,189,000
Change in NCWC -37,384,000
EBIT 1,280,649,000
Tax Provision 431,542,000
Depreciation and Amortization 130,977,000
Capital Expenditure -221,286,000
Unlevered Free Cash Flow 720,737,651
Current Assets 2,029,912,000
Current Cash 415,143,000
Current Liabilities 1,053,196,000
Current Debt 0
Non-Cash Working Capital (NCWC) 561,573,000
Change in NCWC -125,195,000
EBIT 1,324,886,000
Tax Provision 426,698,000
Depreciation and Amortization 131,968,000
Capital Expenditure -255,524,000
Unlevered Free Cash Flow 646,952,059
Current Assets 2,063,032,000
Current Cash 347,239,000
Current Liabilities 1,214,025,000
Current Debt 185,000,000
Non-Cash Working Capital (NCWC) 686,768,000
Change in NCWC -157,137,000
EBIT 1,088,857,000
Tax Provision 369,879,000
Depreciation and Amortization 133,434,000
Capital Expenditure -144,063,000
Unlevered Free Cash Flow 540,115,731
Current Assets 2,132,771,000
Current Cash 334,174,000
Current Liabilities 954,692,000
Current Debt 0
Non-Cash Working Capital (NCWC) 843,905,000
Change in NCWC 14,515,000
EBIT 931,620,000
Tax Provision 316,126,000
Depreciation and Amortization 130,044,000
Capital Expenditure -159,138,000
Unlevered Free Cash Flow 597,669,243
Current Assets 2,047,413,000
Current Cash 434,014,000
Current Liabilities 784,009,000
Current Debt 0
Non-Cash Working Capital (NCWC) 829,390,000
Change in NCWC 54,781,000
EBIT 805,989,000
Tax Provision 268,431,000
Depreciation and Amortization 124,850,000
Capital Expenditure -106,762,000
Unlevered Free Cash Flow 607,911,805
Current Assets 2,320,684,000
Current Cash 759,775,000
Current Liabilities 786,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 774,609,000
Change in NCWC 93,771,000
EBIT 764,674,000
Tax Provision 253,374,000
Depreciation and Amortization 119,494,000
Capital Expenditure -132,303,000
Unlevered Free Cash Flow 590,144,020

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