Discounted Cash Flow Calculation for NSEI:TRENT 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.
NSEI:TRENT DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
Trent's earnings available for a low price, and how does
this compare to other companies in the same industry?
Trent's earnings are expected to grow significantly at over 20% yearly.
Trent's revenue is expected to grow by 18% 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.
Trent'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
4/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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. Philip N. Auld has been the Managing Director of Trent Limited since November 4, 2014. Mr. Auld served as the Chief Executive Officer of Trent Ltd. from April 2011 to November 3, 2014 and was its Manager until November 3, 2014. Mr. Auld has several years of international retail experience. He serves as a Non-Independent Executive Director of Trent Limited.
Philip's compensation has been consistent with company performance over the past year.
Philip's remuneration is higher than average for companies of similar size in India.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Trent management team is about average.
MD & Non-Independent Executive Director
Executive Director of Finance
Company Secretary & Compliance Officer
Senior Vice-President of Operations
General Manager of Finance & Accounts
Head of Human Resources
Head of Corporate Human Resources
Head of Merchandising & Supply Chain
Head of Indian Wear
Chief Commercial Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Trent board of directors is about average.
Did Business Growth Power Trent's (NSE:TRENT) Share Price Gain of 236%?
For example, the Trent Limited (NSE:TRENT) share price has soared 236% in the last half decade. … By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. … Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.
Interested In Trent Limited (NSE:TRENT)? Here's What Its Recent Performance Looks Like
When Trent Limited (NSE:TRENT) announced its most recent earnings (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. … Being able to interpret how well Trent has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. … TRENT's trailing twelve-month earnings (from 31 March 2018) of ₹870m has
Is Trent Limited (NSE:TRENT) Better Than Average At Deploying Capital?
Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Return On Capital Employed (ROCE): What is it? … Analysts use this formula to calculate return on capital employed:
How Financially Strong Is Trent Limited (NSE:TRENT)?
Investors are always looking for growth in small-cap stocks like Trent Limited (NSE:TRENT), with a market cap of ₹117b. … However, an important fact which most ignore is: how financially healthy is the business? … Companies operating in the Multiline Retail industry facing headwinds from current disruption,.
How Many Trent Limited (NSE:TRENT) Shares Do Institutions Own?
Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. … We also tend to see lower insider ownership in companies that were previously publicly owned. … institutions are noticeable on the share registry.
Did Trent Limited (NSE:TRENT) Use Debt To Deliver Its ROE Of 5.5%?
With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.055. … Return on Equity = Net Profit ÷ Shareholders' Equity
What Should You Know About Trent Limited's (NSE:TRENT) Return On Capital?
and want to begin learning the link between Trent Limited (NSE:TRENT)’s return fundamentals and stock market performance. … As a result, your investment is being put to work to fund operations and if you want to earn an attractive return on your investment, the business needs to be making an adequate amount of money from the funds you provide. … You need to pay attention to this because your return on investment is linked to dividends and internal investments to improve the business, which can only occur if the company is expected to produce adequate earnings with the capital that has been provided.
Trent Limited's (NSE:TRENT) Earnings Grew 48%, Did It Beat Long-Term Trend?
Below, I will examine Trent Limited's (NSE:TRENT) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. … Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 33%, indicating the rate at which TRENT is growing has accelerated … What's enabled this growth?
How Much Did Trent Limited's (NSE:TRENT) CEO Pocket Last Year?
Leading Trent Limited (NSE:TRENT) as the CEO, Philip Auld took the company to a valuation of ₹122.69b. … Understanding how CEOs are incentivised to run and grow their company is an important aspect of investing in a stock. … CEOs leading companies of similar size and profitability
Trent Limited, together with its subsidiaries, operates a chain of retail stores primarily under the Westside brand in India. Its Westside departmental stores provide women’s wear, men’s wear, kids’ wear, footwear, lingerie, cosmetics, perfumes and handbags, household furniture, and accessories. The company also operates a hypermarket and convenience stores under the Star brand, which offers staple foods, beverages, health and beauty products, vegetables, fruits, dairy and non-vegetarian products, apparel, and home furnishings. In addition, it operates books and music retail chains under the Landmark name that provides toys, adult and young adult books, sports-related merchandise, tech accessories, and gaming and stationery products. It operates 125 Westside stores and 5 independent Landmark stores, 23 Star Market and 12 Hypermarket stores, and 7 standalone stores and 15 Star stores. The company was incorporated in 1952 and is based in Mumbai, India.
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