DCF Tool

HRL

Hormel Foods Corp. – Animal (except Poultry) Slaughtering
Hormel Foods Corporation, based in Austin, Minn., is a global branded food company with over $9 billion in annual revenue across more than 80 countries worldwide. Its brands include SKIPPY®, SPAM®, Hormel® Natural Choice®, Applegate®, Justin's®, Wholly®, Hormel® Black Label®, Columbus® and more than 30 other beloved brands. The company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, was named on the 'Global 2000 World's Best Employers' list by Forbes magazine for three straight years, is one of Fortune magazine's most admired companies, has appeared on Corporate Responsibility Magazine's 'The 100 Best Corporate Citizens' list for 12 years in a row, and has received numerous other awards and accolades for its corporate responsibility and community service efforts. The company lives by its purpose statement - Inspired People. Inspired Food.™ - to bring some of the world's most trusted and iconic brands to tables across the globe.
Analysis Results
Intrinsic Value $91.20
Latest Price $45.44
Relative Value 50% 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 10.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.4%, 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 1.22 1.18
2023 1.35 1.25
2024 1.49 1.33
2025 1.65 1.41
2026 1.82 1.5
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 54.5 billion. This corresponds to a present value of 43.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.66 billion. Adding in the terminal value gives a total present value of 49.8 billion.

There are presently 546.0 million outstanding shares, so the intrinsic value per share is 91.2.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 5,895,632,000
Current Cash 1,269,384,000
Current Liabilities 2,831,308,000
Current Debt 17,512,000
Non-Cash Working Capital (NCWC) 1,812,452,000
Change in NCWC 1,210,309,000
EBIT 2,245,196,000
Tax Provision 434,058,000
Depreciation and Amortization 456,812,000
Capital Expenditure -464,832,000
Unlevered Free Cash Flow 3,014,803,366
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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