In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to equity (FCFE) is generally described as cash flows available to the equity holder after payments to debt holders and after allowing for expenditures to maintain the company asset base.
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Intel Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Intrinsic Stock Value (Valuation Summary)
Year | Value | FCFE_{t} or Terminal value (TV_{t}) | Calculation | Present value at |
---|---|---|---|---|
0^{1} | FCFE_{0} | |||
1 | FCFE_{1} | = × (1 + ) | ||
2 | FCFE_{2} | = × (1 + ) | ||
3 | FCFE_{3} | = × (1 + ) | ||
4 | FCFE_{4} | = × (1 + ) | ||
5 | FCFE_{5} | = × (1 + ) | ||
5 | Terminal value (TV_{5}) | = × (1 + ) ÷ ( – ) | ||
Intrinsic value of Intel Corp. common stock | ||||
Intrinsic value of Intel Corp. common stock (per share) | ||||
Current share price |
Based on: 10-K (reporting date: 2022-12-31).
^{1} See details »
Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.
Required Rate of Return (r)
Assumptions | ||
Rate of return on LT Treasury Composite^{1} | R_{F} | |
Expected rate of return on market portfolio^{2} | E(R_{M}) | |
Systematic risk of Intel Corp. common stock | β_{INTC} | |
Required rate of return on Intel Corp. common stock^{3} | r_{INTC} |
^{1} Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).
^{2} See details »
^{3} r_{INTC} = R_{F} + β_{INTC} [E(R_{M}) – R_{F}]
= + [ – ]
=
FCFE Growth Rate (g)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29).
2022 Calculations
^{1} Retention rate = (Net income attributable to Intel – Cash dividends declared) ÷ Net income attributable to Intel
= ( – ) ÷
=
^{2} Profit margin = 100 × Net income attributable to Intel ÷ Net revenue
= 100 × ÷
=
^{3} Asset turnover = Net revenue ÷ Total assets
= ÷
=
^{4} Financial leverage = Total assets ÷ Total Intel stockholders’ equity
= ÷
=
^{5} g = Retention rate × Profit margin × Asset turnover × Financial leverage
= × × ×
=
Year | Value | g_{t} |
---|---|---|
1 | g_{1} | |
2 | g_{2} | |
3 | g_{3} | |
4 | g_{4} | |
5 and thereafter | g_{5} |
where:
g_{1} is implied by PRAT model
g_{5} is implied by single-stage model
g_{2}, g_{3} and g_{4} are calculated using linear interpoltion between g_{1} and g_{5}
Calculations
g_{2} = g_{1} + (g_{5} – g_{1}) × (2 – 1) ÷ (5 – 1)
= + ( – ) × (2 – 1) ÷ (5 – 1)
=
g_{3} = g_{1} + (g_{5} – g_{1}) × (3 – 1) ÷ (5 – 1)
= + ( – ) × (3 – 1) ÷ (5 – 1)
=
g_{4} = g_{1} + (g_{5} – g_{1}) × (4 – 1) ÷ (5 – 1)
= + ( – ) × (4 – 1) ÷ (5 – 1)
=