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  • ecota 2011-02-02 18:36
    Hi cm1750,  
    thanks for reading and commenting on the Walmart valuation article.  You are correct - my DCF model is a back-of-the-envelope valuation; one that hopefully more often understates rather than overstates the value of a given stock like WMT.  The assumed 0% growth rate after five years is too harsh for the reasons you mentioned and you're right that the analyst consensus 5-year growth rate is for EPS not FCF.  I just wanted to assume a much lower growth rate for FCF to try and understate rather than overstate WMT's value.  You're right again for pointing out that I should consider FCF for an unlevered WMT - that was an oversimplification on my part.

    All the best,
    Eric Cota

    P.S. - I would've replied to you publicly in the comments to my article but gurufocus just recently contacted me for my articles and didn't give me a sign in for their site - I hope they comp me a membership going forward.
  • Margin of Safet 2010-12-21 10:12
    cm1750: Regarding PEP, I think it is currently worth roughly $71 so it is at a 9% discount now.

    I am using FCF/share for 2013 of $4.66 (= 84% of EPS) and app
    Hello CM,
    Thank you for sharing your calculation. How do you get to the 2013 FCF?
    Happy holidays,
    Ben
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