PKG Intrinsic Value

PKG

Packaging Corp Of America – Corrugated and Solid Fiber Box Manufacturing

packaging corporation of america (pca) is the fourth largest producer of containerboard and corrugated packaging products in the united states. in 2013 pca produced 2.7 million tons of containerboard and shipped 38.4 billion square feet of corrugated products. in 2013 pca acquired boise, inc., growing to $5.5 billion in sales and 13,600 employees. pca operates eight mills and a total of 94 converting operations/locations. pca is the third largest producer of uncoated freesheet paper in north america. pca combines great products with a creative and knowledgeable total-service team to provide ideas and solutions for any packaging need: "when you choose packaging corporation of america, you work with people who do the right things for each other and for our customers. we believe in utilizing the power of strong collaborative relationships, bound by the trust we have earned, to deliver innovative packaging solutions and an outstanding service experience." pca is a publically traded c

Analysis Results

Intrinsic Value	$200.02
Latest Price	$150.80
Relative Value	25% undervalued

Share results:

Thoughts on this result? Let us know.

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 4.8%.

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 4.8%, 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)
2023	0.913	0.851
2024	0.956	0.831
2025	1.0	0.811
2026	1.05	0.792
2027	1.1	0.773

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 21.2 billion. This corresponds to a present value of 13.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 4.06 billion. Adding in the terminal value gives a total present value of 18.0 billion.

There are presently 89.9 million outstanding shares, so the intrinsic value per share is 200.02.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	2,508,300,000
Current Cash	405,200,000
Current Liabilities	875,500,000
Current Debt	1,900,000
Non-Cash Working Capital (NCWC)	1,229,500,000
Change in NCWC	84,700,000
EBIT	1,482,000,000
Tax Provision	335,000,000
Depreciation and Amortization	456,800,000
Capital Expenditure	-830,400,000
Unlevered Free Cash Flow	829,332,415

Current Assets	2,732,700,000
Current Cash	704,800,000
Current Liabilities	884,800,000
Current Debt	1,700,000
Non-Cash Working Capital (NCWC)	1,144,800,000
Change in NCWC	255,700,000
EBIT	1,296,200,000
Tax Provision	267,600,000
Depreciation and Amortization	417,500,000
Capital Expenditure	-606,900,000
Unlevered Free Cash Flow	1,049,644,295

Current Assets	2,750,300,000
Current Cash	1,080,200,000
Current Liabilities	782,600,000
Current Debt	1,600,000
Non-Cash Working Capital (NCWC)	889,100,000
Change in NCWC	-99,600,000
EBIT	829,800,000
Tax Provision	171,700,000
Depreciation and Amortization	409,900,000
Capital Expenditure	-427,600,000
Unlevered Free Cash Flow	487,311,664

Current Assets	2,478,400,000
Current Cash	767,400,000
Current Liabilities	723,800,000
Current Debt	1,500,000
Non-Cash Working Capital (NCWC)	988,700,000
Change in NCWC	-72,700,000
EBIT	1,086,400,000
Tax Provision	220,600,000
Depreciation and Amortization	387,500,000
Capital Expenditure	-403,300,000
Unlevered Free Cash Flow	736,547,938

Current Assets	2,115,100,000
Current Cash	361,500,000
Current Liabilities	693,600,000
Current Debt	1,400,000
Non-Cash Working Capital (NCWC)	1,061,400,000
Change in NCWC	44,600,000
EBIT	1,108,900,000
Tax Provision	232,500,000
Depreciation and Amortization	410,900,000
Capital Expenditure	-555,900,000
Unlevered Free Cash Flow	742,843,894

Current Assets	1,915,100,000
Current Cash	216,900,000
Current Liabilities	832,700,000
Current Debt	151,300,000
Non-Cash Working Capital (NCWC)	1,016,800,000
Change in NCWC	158,100,000
EBIT	949,600,000
Tax Provision	160,000,000
Depreciation and Amortization	391,400,000
Capital Expenditure	-350,800,000
Unlevered Free Cash Flow	964,935,288

Current Assets	1,696,300,000
Current Cash	239,300,000
Current Liabilities	625,400,000
Current Debt	27,100,000
Non-Cash Working Capital (NCWC)	858,700,000
Change in NCWC	42,600,000
EBIT	804,600,000
Tax Provision	238,900,000
Depreciation and Amortization	358,000,000
Capital Expenditure	-274,300,000
Unlevered Free Cash Flow	651,714,901

Current Assets	1,554,500,000
Current Cash	184,200,000
Current Liabilities	561,900,000
Current Debt	7,700,000
Non-Cash Working Capital (NCWC)	816,100,000
Change in NCWC	-34,200,000
EBIT	756,700,000
Tax Provision	227,700,000
Depreciation and Amortization	364,300,000
Capital Expenditure	-314,500,000
Unlevered Free Cash Flow	513,006,410

Current Assets	1,578,600,000
Current Cash	124,900,000
Current Liabilities	611,000,000
Current Debt	7,600,000
Non-Cash Working Capital (NCWC)	850,300,000
Change in NCWC	174,565,000
EBIT	760,000,000
Tax Provision	221,700,000
Depreciation and Amortization	390,800,000
Capital Expenditure	-420,200,000
Unlevered Free Cash Flow	630,882,076

Current Assets	1,487,204,000
Current Cash	190,960,000
Current Liabilities	660,539,000
Current Debt	40,030,000
Non-Cash Working Capital (NCWC)	675,735,000
Change in NCWC	189,977,000
EBIT	532,585,000
Tax Provision	-20,951,000
Depreciation and Amortization	217,918,000
Capital Expenditure	-234,422,000
Unlevered Free Cash Flow	706,058,000

Current Assets	937,033,000
Current Cash	207,393,000
Current Liabilities	259,846,000
Current Debt	15,964,000
Non-Cash Working Capital (NCWC)	485,758,000
Change in NCWC	190,790,000
EBIT	347,959,000
Tax Provision	216,739,000
Depreciation and Amortization	171,280,000
Capital Expenditure	-129,594,000
Unlevered Free Cash Flow	382,262,612

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.