KR Intrinsic Value

KR

Kroger Co. – Supermarkets and Other Grocery (except Convenience) Stores

kroger, one of the world’s largest retailers, employs more than 339,000 associates who serve customers in 2,425 supermarkets and multi-department stores in 31 states under two dozen local banner names including kroger, city market, dillons, jay c, food 4 less, fred meyer, fry's, king soopers, qfc, ralphs and smith's. the company also operates 789 convenience stores, 337 fine jewelry stores, 1,109 supermarket fuel centers and 38 food processing plants in the u.s. kroger also operates over 80 “the little clinic” retail healthcare sites inside select kroger, king sooper and fry’s stores. recognized by forbes as the most generous company in america, kroger supports hunger relief, breast cancer awareness, the military and their families, and more than 30,000 schools and grassroots organizations in the communities it serves. kroger contributes food and funds equal to 160 million meals a year through more than 80 feeding america food bank partners. for more information please visit kroger.c

Analysis Results

Intrinsic Value	$191.67
Latest Price	$45.12
Relative Value	76% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 13.4%.

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 13.4%, 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)
2024	3.07	2.95
2025	3.48	3.21
2026	3.94	3.51
2027	4.47	3.82
2028	5.07	4.17

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 152 billion. This corresponds to a present value of 120 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 17.7 billion. Adding in the terminal value gives a total present value of 138 billion.

There are presently 719.0 million outstanding shares, so the intrinsic value per share is 191.67.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	12,670,000,000
Current Cash	1,015,000,000
Current Liabilities	17,238,000,000
Current Debt	1,310,000,000
Non-Cash Working Capital (NCWC)	-4,273,000,000
Change in NCWC	1,142,000,000
EBIT	4,126,000,000
Tax Provision	653,000,000
Depreciation and Amortization	3,579,000,000
Capital Expenditure	-3,078,000,000
Unlevered Free Cash Flow	4,840,578,911

Current Assets	12,174,000,000
Current Cash	1,821,000,000
Current Liabilities	16,323,000,000
Current Debt	555,000,000
Non-Cash Working Capital (NCWC)	-5,415,000,000
Change in NCWC	-1,399,000,000
EBIT	3,477,000,000
Tax Provision	385,000,000
Depreciation and Amortization	3,429,000,000
Capital Expenditure	-2,614,000,000
Unlevered Free Cash Flow	2,240,320,819

Current Assets	12,286,000,000
Current Cash	2,820,000,000
Current Liabilities	14,578,000,000
Current Debt	1,096,000,000
Non-Cash Working Capital (NCWC)	-4,016,000,000
Change in NCWC	-377,000,000
EBIT	2,937,000,000
Tax Provision	764,000,000
Depreciation and Amortization	3,057,000,000
Capital Expenditure	-2,890,000,000
Unlevered Free Cash Flow	2,038,274,401

Current Assets	10,890,000,000
Current Cash	399,000,000
Current Liabilities	14,243,000,000
Current Debt	1,965,000,000
Non-Cash Working Capital (NCWC)	-1,787,000,000
Change in NCWC	-1,044,000,000
EBIT	2,251,000,000
Tax Provision	469,000,000
Depreciation and Amortization	2,649,000,000
Capital Expenditure	-3,128,000,000
Unlevered Free Cash Flow	195,077,738

Current Assets	10,803,000,000
Current Cash	429,000,000
Current Liabilities	14,274,000,000
Current Debt	3,157,000,000
Non-Cash Working Capital (NCWC)	-743,000,000
Change in NCWC	-876,000,000
EBIT	2,614,000,000
Tax Provision	900,000,000
Depreciation and Amortization	2,465,000,000
Capital Expenditure	-3,011,000,000
Unlevered Free Cash Flow	600,597,285

Current Assets	11,117,000,000
Current Cash	347,000,000
Current Liabilities	14,197,000,000
Current Debt	3,560,000,000
Non-Cash Working Capital (NCWC)	133,000,000
Change in NCWC	723,000,000
EBIT	2,085,000,000
Tax Provision	-405,000,000
Depreciation and Amortization	2,436,000,000
Capital Expenditure	-2,809,000,000
Unlevered Free Cash Flow	2,435,000,000

Current Assets	10,340,000,000
Current Cash	322,000,000
Current Liabilities	12,860,000,000
Current Debt	2,252,000,000
Non-Cash Working Capital (NCWC)	-590,000,000
Change in NCWC	396,000,000
EBIT	3,436,000,000
Tax Provision	957,000,000
Depreciation and Amortization	2,340,000,000
Capital Expenditure	-3,699,000,000
Unlevered Free Cash Flow	1,344,567,604

Current Assets	9,892,000,000
Current Cash	277,000,000
Current Liabilities	12,971,000,000
Current Debt	2,370,000,000
Non-Cash Working Capital (NCWC)	-986,000,000
Change in NCWC	-111,000,000
EBIT	3,576,000,000
Tax Provision	1,045,000,000
Depreciation and Amortization	2,089,000,000
Capital Expenditure	-3,349,000,000
Unlevered Free Cash Flow	997,204,266

Current Assets	8,911,000,000
Current Cash	268,000,000
Current Liabilities	11,403,000,000
Current Debt	1,885,000,000
Non-Cash Working Capital (NCWC)	-875,000,000
Change in NCWC	-256,000,000
EBIT	3,137,000,000
Tax Provision	902,000,000
Depreciation and Amortization	1,948,000,000
Capital Expenditure	-2,831,000,000
Unlevered Free Cash Flow	929,833,144

Current Assets	8,830,000,000
Current Cash	401,000,000
Current Liabilities	10,705,000,000
Current Debt	1,657,000,000
Non-Cash Working Capital (NCWC)	-619,000,000
Change in NCWC	-17,000,000
EBIT	2,725,000,000
Tax Provision	751,000,000
Depreciation and Amortization	1,703,000,000
Capital Expenditure	-2,330,000,000
Unlevered Free Cash Flow	1,184,209,903

Current Assets	7,959,000,000
Current Cash	238,000,000
Current Liabilities	11,057,000,000
Current Debt	2,734,000,000
Non-Cash Working Capital (NCWC)	-602,000,000
Change in NCWC	51,000,000
EBIT	2,764,000,000
Tax Provision	794,000,000
Depreciation and Amortization	1,652,000,000
Capital Expenditure	-2,062,000,000
Unlevered Free Cash Flow	1,451,648,132

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