Discounted Cash Flow Calculation for WBAG:ABIN using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
WBAG:ABIN DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Anheuser-Busch InBev's share price is below the future cash flow value, and at a moderate discount (> 20%).
Anheuser-Busch InBev's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Anheuser-Busch InBev's earnings available for a low price, and how does
this compare to other companies in the same industry?
Anheuser-Busch InBev's earnings are expected to grow by 18.9% yearly, however this is not considered high growth (20% yearly).
Anheuser-Busch InBev's revenue is expected to grow by 3.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Anheuser-Busch InBev's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Anheuser-Busch InBev's finances.
The net worth of a company is the difference between its assets and liabilities.
Anheuser-Busch InBev's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Anheuser-Busch InBev's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Anheuser-Busch InBev's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Debt is not covered by short term assets, assets are 0.2x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Carlos Alves de Brito has been the Chief Executive Officer of Anheuser-Busch InBev SA/NV since December 2005 and serves as its Member of Executive Board of Management. Mr. de Brito served as Sales Director of Cervejarias Kaiser Brasil S/A. He served as Zone President for North America Region of Anheuser-Busch InBev from January 2005 to December 2005. He served as Chief Executive Officer of Companhia De Bebidas Das Americas - AMBEV and Ambev S.A. since January 2004. He served as the Chief Executive Officer for North America at Ambev S.A. since 2005. He served as Chief Operating Officer for Brazilian Operations of Ambev S.A. since 2004. He served as the Chief Operating Officer of Ambev S.A. from 1999 to 2003. He served as Director of Operations of Ambev S.A. from 2002 to 2004 and also served as its Operations Executive Officer since 2000. He joined AmBev in 1989. He joined Brahma in 1989 and held various management positions during his tenure. He previously worked at Shell Oil and Daimler Benz. He has been Co-Chairman of Anheuser-Busch InBev since December 27, 2005. He has been a Co-Chairman of Ambev S.A. since 2006. He is a member of the board of directors of Ambev and of the Advisory Board of Grupo Modelo. He served as Co-Chairman of Companhia de Bebidas Das Americas and Ambev S.A. since 2006. He has been a Director of Africa Board at Anheuser-Busch InBev SA/NV since October 10, 2016. He is also an Advisory Council Member of the Stanford Graduate School of Business and serves on the Advisory Board of the Tsinghua University School of Economics and Management. Mr. de Brito holds Degree in Mechanical Engineering from the Federal University of Rio de Janeiro and MBA from Stanford University.
Carlos's compensation has been consistent with company performance over the past year.
Insufficient data for Carlos to establish whether their remuneration is reasonable compared to companies of similar size in .
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Anheuser-Busch InBev management team is over 5 years, this suggests they are a seasoned and experienced team.
Carlos de Brito
CEO & Member of Executive Management Board
CTO, Chief Financial & Solutions Officer and Member of Executive Management Board
Chief of Special Global Projects-Marketing & Member of Executive Management Board
Member of Executive Management Board
Zone President of Europe & Member of Executive Management Board
Pedro De Sá Earp
Chief Marketing & ZX Ventures Officer and Member of Executive Management Board
Chief Procurement & Sustainability Officer and Member of Executive Management Board
Member of Executive Management Board
Chief Sales Officer & Member of Executive Management Board
Chief People Officer & Member of Executive Management Board
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Anheuser-Busch InBev board of directors is about average.
Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, distribution, and sale of beer, alcoholic beverages, and soft drinks. The company offers a portfolio of approximately 500 beer brands, including Budweiser, Corona, and Stella Artois; Beck’s, Castle, Castle Lite, Hoegaarden, and Leffe; and Aguila, Antarctica, Bud Light, Brahma, Cass, Cristal, Harbin, Jupiler, Michelob Ultra, Modelo Especial, Quilmes, Victoria, Sedrin, and Skol. It has operations in North America, Latin America West, Latin America North, Latin America South, Europe, Africa, and the Asia Pacific. The company was founded in 1366 and is headquartered in Leuven, Belgium.
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