Safeway Inc. (SWY)
Discount cash flow analysis
Price history
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $18.25 | $17.87 | $17.49 | |
Terminal Growth% | 0 | $18.32 | $17.93 | $17.56 |
+1% | $18.39 | $18.00 | $17.63 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $0.00 (overvalued by 100.0%) - over 4 years ago
- SethWellbourne created a new valuation of $17.93 (overvalued by 11.11%) - almost 12 years ago
- GordonGekko created a new valuation of $19.60 (undervalued by 1.87%) - almost 12 years ago
- Diegoengel created a new valuation of $21.46 (overvalued by 19.78%) - almost 13 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 20,171 |
Net Debt (Long-term borrowings less cash): | 5,117 |
Equity Value: | 8,650 |
Number of Shares Outstanding: | 428,000,000 |
Calculated value per share: | $17.93 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.