SXC Intrinsic Value

SXC

SunCoke Energy Inc – Iron and Steel Mills and Ferroalloy Manufacturing

SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke used in the blast furnace production of steel, under long-term, take-or-pay contracts that pass through commodity and certain operating costs to customers. We utilize an innovative heat-recovery technology that captures excess heat for steam or electrical power generation. Our cokemaking facilities are located in Illinois, Indiana, Ohio, Virginia and Brazil. We have more than 55 years of cokemaking experience serving the integrated steel industry. In addition, we provide export and domestic material handling services to coke, coal, steel, power and other bulk and liquids customers. Our logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports.

Analysis Results

Intrinsic Value	$60.80
Latest Price	$7.19
Relative Value	88% undervalued

Share results:

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Cash Flow (Millions)

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 10.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.0%, 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 (million)	Present value (million)
2023	209	195
2024	229	200
2025	252	205
2026	277	211
2027	305	217

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 6120 million. This corresponds to a present value of 4060 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1030 million. Adding in the terminal value gives a total present value of 5090 million.

There are presently 83.7 million outstanding shares, so the intrinsic value per share is 60.8.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	374,000,000
Current Cash	90,000,000
Current Liabilities	224,000,000
Current Debt	3,300,000
Non-Cash Working Capital (NCWC)	63,300,000
Change in NCWC	34,200,000
EBIT	153,700,000
Tax Provision	16,800,000
Depreciation and Amortization	142,500,000
Capital Expenditure	-75,500,000
Unlevered Free Cash Flow	233,682,580

Current Assets	271,900,000
Current Cash	63,800,000
Current Liabilities	182,200,000
Current Debt	3,200,000
Non-Cash Working Capital (NCWC)	29,100,000
Change in NCWC	3,700,000
EBIT	141,500,000
Tax Provision	18,300,000
Depreciation and Amortization	133,900,000
Capital Expenditure	-98,600,000
Unlevered Free Cash Flow	141,909,090

Current Assets	229,700,000
Current Cash	48,400,000
Current Liabilities	158,900,000
Current Debt	3,000,000
Non-Cash Working Capital (NCWC)	25,400,000
Change in NCWC	6,100,000
EBIT	69,700,000
Tax Provision	10,300,000
Depreciation and Amortization	133,700,000
Capital Expenditure	-73,900,000
Unlevered Free Cash Flow	98,013,089

Current Assets	308,300,000
Current Cash	97,100,000
Current Liabilities	194,800,000
Current Debt	2,900,000
Non-Cash Working Capital (NCWC)	19,300,000
Change in NCWC	-2,800,000
EBIT	103,100,000
Tax Provision	-54,700,000
Depreciation and Amortization	143,800,000
Capital Expenditure	-110,100,000
Unlevered Free Cash Flow	134,000,000

Current Assets	335,000,000
Current Cash	145,700,000
Current Liabilities	171,100,000
Current Debt	3,900,000
Non-Cash Working Capital (NCWC)	22,100,000
Change in NCWC	6,900,000
EBIT	118,700,000
Tax Provision	4,600,000
Depreciation and Amortization	141,600,000
Capital Expenditure	-100,300,000
Unlevered Free Cash Flow	156,318,217

Current Assets	311,200,000
Current Cash	120,200,000
Current Liabilities	178,400,000
Current Debt	2,600,000
Non-Cash Working Capital (NCWC)	15,200,000
Change in NCWC	200,000
EBIT	102,900,000
Tax Provision	-81,600,000
Depreciation and Amortization	128,200,000
Capital Expenditure	-75,600,000
Unlevered Free Cash Flow	155,700,000

Current Assets	316,100,000
Current Cash	134,000,000
Current Liabilities	172,000,000
Current Debt	4,900,000
Non-Cash Working Capital (NCWC)	15,000,000
Change in NCWC	-23,100,000
EBIT	111,300,000
Tax Provision	8,600,000
Depreciation and Amortization	114,200,000
Capital Expenditure	-63,700,000
Unlevered Free Cash Flow	124,644,493

Current Assets	326,100,000
Current Cash	123,400,000
Current Liabilities	165,700,000
Current Debt	1,100,000
Non-Cash Working Capital (NCWC)	38,100,000
Change in NCWC	-21,900,000
EBIT	58,200,000
Tax Provision	-8,800,000
Depreciation and Amortization	109,100,000
Capital Expenditure	-75,800,000
Unlevered Free Cash Flow	69,600,000

Current Assets	408,800,000
Current Cash	139,000,000
Current Liabilities	209,800,000
Current Debt	0
Non-Cash Working Capital (NCWC)	60,000,000
Change in NCWC	53,700,000
EBIT	91,600,000
Tax Provision	7,400,000
Depreciation and Amortization	96,100,000
Capital Expenditure	-118,300,000
Unlevered Free Cash Flow	64,665,517

Current Assets	481,900,000
Current Cash	233,600,000
Current Liabilities	283,000,000
Current Debt	41,000,000
Non-Cash Working Capital (NCWC)	6,300,000
Change in NCWC	17,300,000
EBIT	109,100,000
Tax Provision	6,700,000
Depreciation and Amortization	96,000,000
Capital Expenditure	-145,600,000
Unlevered Free Cash Flow	63,930,809

Current Assets	471,900,000
Current Cash	239,200,000
Current Liabilities	247,000,000
Current Debt	3,300,000
Non-Cash Working Capital (NCWC)	-11,000,000
Change in NCWC	-19,300,000
EBIT	173,700,000
Tax Provision	23,400,000
Depreciation and Amortization	80,800,000
Capital Expenditure	-80,600,000
Unlevered Free Cash Flow	122,315,806

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