The calculations below outline how an intrinsic value for SpartanNash is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$127.36||$151.56||$178.84||$209.24||$242.72|
|Source||Extrapolated @ (20%, capped from 38.36%)||Extrapolated @ (19%, capped from 38.36%)||Extrapolated @ (18%, capped from 38.36%)||Extrapolated @ (17%, capped from 38.36%)||Extrapolated @ (16%, capped from 38.36%)|
Discounted (@ 8.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $243 × (1 + 2.5%) ÷ (8.49% – 2.5%)
Terminal value based on the Perpetuity Method where growth (g) = 2.5%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($3,445 / 37)
Value per share:
Current discount (share price of $35.68): 61%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.49% = 2.47% + (0.8 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.662 = 0.539 (1 + (1- 30%) (32.5%))
Levered Beta used in calculation = 0.8
Are SpartanNash's annual earnings growth expected to exceed 3.6% over the next 3 years?
Mr. Dennis Eidson has been the Chief Executive Officer of SpartanNash Company since October 15, 2008. Mr. Eidson has been the President of Spartan Stores Inc. since October 22, 2007 and has been Chief Executive Officer since October 15, 2008. He has been the President of Nash Finch Co. since November 19, 2013. He serves as the President at U Save Foods, Inc. He has experience in the grocery retail and distribution industry. He served as President of SpartanNash Company from October 22, 2007 to August 2016. He served as Chief Operating Officer of Spartan Stores Inc., from February 21, 2007 to October 2008. He served as an Executive Vice President of Spartan Stores Inc. and also its Executive Vice President of Marketing and Merchandising from March 17 2003 to October 22, 2007. He served as the President of Borman's, Inc. (also known as, Farmer Jack Supermarkets). He served as the Chief Operating Officer of SpartanNash Company from February 21, 2007 to October 2008 and as Executive Vice President from February 13, 2007 to October 2008, Executive Vice President of Merchandising since March 17, 2003 and Executive Vice President of Marketing from March 17, 2003 to February 13, 2007. He served as Divisional President and Chief Executive Officer of Great Atlantic and Pacific Tea Company's (A&P) Midwest region from October 2000 to July 2002, its Executive Vice President of Sales and Merchandising from March 2000 to October 2000 and Vice President of Merchandising of A&P's Farmer Jack division from June 1997 to March 2000. He was instrumental in implementing successful and disciplined category management programs for A&P's Farmer Jack retail Grocery Operations. He served as an Assistant General Manager for Nash Finch, Inc.'s Michigan operations. He has spent his entire career working in the Michigan and Ohio region's Grocery Industry, has a profound knowledge of Grocery Industry Primary Markets. He has been Chairman of the Board at SpartanNash Company since June 02, 2016. He has been a Director of SpartanNash Company and Spartan Stores Inc. since October 22, 2007. He serves as a Director of Heart Of West Michigan United Way. He has been a Director of Nash Finch Co. since November 19, 2013. Mr. Eidson is a Graduate of Michigan State University's Food Management program.
Average tenure of the SpartanNash management team:
Average tenure of the SpartanNash board of directors:
SpartanNash Company distributes and retails grocery products. It operates in three segments: Food Distribution, Military, and Retail. The Food Distribution segment offers approximately 60,000 stock-keeping units, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, pharmacy, and health and beauty care products to independent retail locations, food service distributors, and corporate-owned retail stores. This segment also offers value-added services to independent food distribution customers. The Military segment sells and distributes grocery products to military commissaries and exchanges located in 45 states across the United States and the District of Columbia, Europe, Puerto Rico, Cuba, Bahrain, and Egypt. The Retail segment operates retail stores in the Midwest and Great Lakes regions primarily under the banners of Family Fare Supermarkets, VG’s Food and Pharmacy, D&W Fresh Markets, Sun Mart, and Family Fresh Market; and fuel centers primarily at its retail stores under the banners of Family Fare Quick Stop, D&W Quick Stop, VG’s Quick Stop, Forest Hills Quick Stop, and Sun Mart Express Fuel. Its retail stores offer branded perishable food products, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, and pharmacy services, as well as approximately 7,100 private brand items primarily under the Spartan and Our Family, Open Acres, Top Care, Tippy Toes, Full Circle, B-leve, PAWS Premium, and Valu Time names. As of December 31, 2016, this segment operated 157 retail stores; and 30 fuel centers. The company was formerly known as Spartan Stores, Inc. and changed its name to SpartanNash Company in May 2014. SpartanNash Company was founded in 1917 and is headquartered in Grand Rapids, Michigan.
|Market Cap:||$1,327 million|
850 76th Street, SW, Grand Rapids, 49518, United States
|Sector:||Food and Staples Retailing|