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GuruFocus has detected 5 Warning Signs with Constellation Brands Inc $STZ.
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Constellation Brands Inc (NYSE:STZ)
Intrinsic Value: Projected FCF
$70.75 (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, Constellation Brands Inc's projected FCF intrinsic value is $70.75. The stock price of Constellation Brands Inc is $180.93. Therefore, Constellation Brands Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 2.6.

STZ' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.92   Max: 11.3
Current: 2.56

0.92
11.3

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Constellation Brands Inc was 11.30. The lowest was 0.92. And the median was 1.73.

STZ's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than
51% of the 94 Companies
in the Global Beverages - Wineries & Distilleries industry.

( Industry Median: 2.13 vs. STZ: 2.56 )

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 Constellation Brands Inc's FCF(6 year avg) is calculate as

Constellation Brands Inc Quarterly Data

201411201502201505201508201511201602201605201608201611201702
total_freecashflow -1511537643270-55177500148-36
201205201208201211201302201305201308201311201402201405201408
total_freecashflow 772564157-1945910360101259
201105201108201111201202
total_freecashflow 220258109129

Add all the Free Cash Flow together and divide 6 will get Constellation Brands Inc's FCF(6 year avg) = $580.87.

Constellation Brands Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Feb17)*0.8)/Shares Outstanding
=(14.8626533105*580.866666667+6891.2*0.8)/199.944
=70.75

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

Constellation Brands Inc'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
=180.93/70.7507096301
=2.56

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

Constellation Brands Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
Projected FCF 15.4514.1216.1818.7122.3634.3844.4457.8164.5370.75

Constellation Brands Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
Projected FCF 57.7157.8162.2466.2767.6664.5367.3171.7972.5670.75
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