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Brown-Forman Corp (NYSE:BF.B)
Intrinsic Value: Projected FCF
$26.27 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Brown-Forman Corp's projected FCF intrinsic value is $26.27. The stock price of Brown-Forman Corp is $97.42. Therefore, Brown-Forman Corp's Price to Intrinsic Value: Projected FCF Ratio of today is 3.7.

BF.B' s 10-Year Price to Intrinsic Value: Projected FCF Range
Min: 1.39   Max: 3.3
Current: 3.71

1.39
3.3

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Brown-Forman Corp was 3.30. The lowest was 1.39. And the median was 2.06.

BF.B's Price to Intrinsic Value: Projected FCF is ranked lower than
84% of the 116 Companies
in the Global Beverages - Wineries & Distilleries industry.

( Industry Median: 1.75 vs. BF.B: 3.71 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Brown-Forman Corp's FCF(6 year avg) is calculate as

Brown-Forman Corp Quarterly Data

201304201307201310201401201404201407201410201501201504201507
total_freecashflow 132687316021981-74272204108
201010201101201104201107201110201201201204201207201210201301
total_freecashflow 7220911350791721477056182
200910201001201004201007
total_freecashflow 8221410389

Add all the Free Cash Flow together and divide 6 will get Brown-Forman Corp's FCF(6 year avg) = $480.20.

Brown-Forman Corp's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jul15)*0.8)/Shares Outstanding
=(9.78491808671*480.2+1707*0.8)/208.638
=29.07

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Brown-Forman Corp's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=97.42/29.0662183554
=3.35

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Brown-Forman Corp Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
Projected FCF 13.9014.5617.4719.8126.9129.9332.3630.5432.6230.03

Brown-Forman Corp Quarterly Data

Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15
Projected FCF 30.5429.6133.0532.7832.6231.4132.8732.6530.0326.37
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