The calculations below outline how an intrinsic value for
United States Steel
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)||$333.25||$376.00||$323.63||$278.55||$239.76|
|Source||Analyst x4||Analyst x4||Extrapolated @ (-13.93%)||Extrapolated @ (-13.93%)||Extrapolated @ (-13.93%)|
Discounted (@ 12.72%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $240 × (1 + 2.47%) ÷ (12.72% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$2,440 = $1,122 + $1,318
Value = Total value / Shares Outstanding ($2,440 / 176)Discount to Share Price
Value per share:
Current discount (share price of $38.76): -179.87%
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 = 12.72% = 2.47% + (1.361 * 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). Note the market value of equity is used not the book value ($6,786,624,282).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.361 = 0.981 (1 + (1- 2.7%) (39.83%))
Levered Beta used in calculation = 1.361
Mr. David Boyd Burritt, also known as Dave, has been the Chief Executive Officer of United States Steel Corporation since May 8, 2017 and its President since February 28, 2017 and served as its Chief Operating Officer from February 28, 2017 to May 8, 2017. Mr. Burritt served as Chief Financial Officer and Executive Vice President of United States Steel Corp. from September 1, 2013 to February 28, 2017. Mr. Burritt served as the Chief Financial Officer of Caterpillar Inc. from 2004 to June 1, 2010, Vice President from December 1, 2004 to June 1, 2010 and served as its Vice President of Global Finance & Strategic Support Division until June 2010. He served as the Chief Accounting Officer of Caterpillar Inc. from 2002 to November 2007 and its Controller from 2002 to February 1, 2005. Mr. Burritt served as a Director of Strategy & Planning, Caterpillar Overseas S.A. from 1998 to 1999, General Manager of Strategic & Business Services for Europe at Caterpillar Overseas S.A from 1999 to 2001 and Corporate 6 Sigma Champion from 2001 to 2002. He began his career at Caterpillar in 1978 as an Accountant and held various positions of increasing responsibility for Caterpillar in finance, tax, accounting and international operations for Caterpillar Inc. from 1978 to 2002. He served as an Inventory and Budget Accountant in Caterpillar's foundry operations and then moved to its General Offices in financial reporting and tax roles. In 1990, as Manager of Business Measurements, he helped facilitate Caterpillar's reorganization into accountable business units by designing a new corporate metrics system and business unit reporting structure. Beginning in 1994, he gained international experience by assuming the role of business manager for Cat Belgium S.A. He has been a Director of United States Steel Corporation since May 8, 2017. Mr. Burritt has been a Director of Lockheed Martin Corporation since April 2008. He serves as a Director at Aperam South America S.A. He was a Member of Advisory Council at The Hackett Group, Inc. He served as a Director of Factory Mutual Insurance Company since June 12, 2006. He served as a Director of Allegion Plc. He served as an Independent Director of Global Brass and Copper Holdings, Inc. from July 2011 to May 22, 2014. He served as an Independent Director of Aperam from December 2010 to May 24, 2013. He is a Lifetime Member of Phi Kappa Phi. Mr. Burritt is a Certified Public Accountant and Member of the American Institute of CPAs. He is a Certified Management Accountant and Member of the Institute of Management Accountants. He is a Member of the Corporate Executive Board's Controllers' Leadership Roundtable, Financial Executives International and the Conference Board Council of Corporate Controllers. He is also a Certified Public Accountant (CPA), a Member of the American Institute of Certified Public Accountants (AICPA), a Certified Management Accountant and a Member of the Institute of Management Accountants (IMA). Mr. Burritt graduated with a Bachelor of Science degree in Accounting from Bradley University in 1977. He earned an MBA from the University of Illinois in 1990. He also completed the Stanford University Executive Program in 1998.
Average tenure and age of the United States Steel management team in years:
Average tenure and age of the United States Steel board of directors in years:
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for X Price per share = $44.75 Earnings per share = $2.214 ∴ Price-Earnings Ratio = $44.75 ÷ $2.214 = 20.2x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Since X's P/E of 20.2x is higher than its industry peers (12.2x), it means that investors are paying more than they should for each dollar of X's earnings. … For example, if you are inadvertently comparing riskier firms with X, then X’s P/E would naturally be higher than its peers since investors would reward its lower risk with a higher price.Simply Wall St - – Full article
Since United States Steel Corporation (NYSE:X) released its earnings in December 2017, analysts seem highly optimistic, with earnings expected to grow by a high double-digit of 72.02% in the upcoming year, against the historical 5-year average growth rate of -6.18%. … Below is a brief commentary around United States Steel's earnings outlook going forward, which may give you a sense of market sentiment for the company. … The intrinsic value infographic in our free research report helps visualize whether United States Steel is currently mispriced by the market?Simply Wall St - – Full article
The latest earnings release United States Steel Corporation's (NYSE:X) announced in December 2017 revealed that the business finally turned profitable after negative earnings on average over the last few years. … Below is my commentary, albeit very simple and high-level, on how market analysts perceive United States Steel's earnings growth trajectory over the next few years and whether the future looks brighter. … See our latest analysis for United States Steel Market analysts' consensus outlook for next year seems positive, with earnings climbing by a significant 70.74%.Simply Wall St - – Full article
United States Steel Corporation (NYSE:X), a metals and mining company based in United States, received a lot of attention from a substantial price increase on the NYSE over the last few months. … If you believe United States Steel should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. … However, the optimistic prospect is encouraging for United States Steel, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.Simply Wall St - – Full article
Moreover, X has produced cash from operations of $727.0M in the last twelve months, leading to an operating cash to total debt ratio of 23.99%, signalling that X’s operating cash is sufficient to cover its debt. … At the current liabilities level of $2,331.0M liabilities, the company has been able to meet these commitments with a current assets level of $4,356.0M, leading to a 1.87x current account ratio. … In X's, case, the ratio of 2.17x suggests that interest is not strongly covered, which means that lenders may be more reluctant to lend out more funding as X’s low interest coverage already puts the company at higher risk of default.Next Steps: At its current level of cash flow coverage, X has room for improvement to better cushion for events which may require debt repayment.Simply Wall St - – Full article
5-year cash flow estimate 2017 2018 2019 2020 2021 Levered FCF (USD, Millions) $174.10 $503.50 $646.50 $581.00 $786.00 Source Analyst x2 Analyst x2 Analyst x2 Analyst x1 Analyst x1 Present Value Discounted @ 14.11% $152.57 $386.67 $435.10 $342.66 $406.24 Present value of next 5 years cash flows: $1,723 We now need to calculate the Terminal Value, which accounts for all the future cash flows after the 5 years. … Terminal Value Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g) Terminal Value = $786 × (1 + 2.5%) ÷ (14.1% – 2.5%) Terminal value based on the Perpetuity Method where growth (g) = 2.5%: $6,919 Present value of terminal value: $3,576 So the total value is the sum of the next 5 years cash flows and the terminal value discounted to today, this is known as the Equity Value. … Equity Value Equity Value (Total value) = Present value of next 5 years cash flows + terminal value = $1,723 + $3,576 = $5,299 The last step is to then divide the equity value by the number of shares outstanding.Simply Wall St - – Full article
United States Steel Corporation produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products. This segment serves customers in the service center, conversion, automotive, construction, container, and appliance and electrical markets. The USSE segment provides slabs, sheets, strip mill plates, tin mill products, and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves customers in the construction, service center, conversion, container, transportation, appliance and electrical, oil, gas, and petrochemical markets. The Tubular segment offers seamless and electric resistance welded steel casing and tubing products; and standard and line pipe and mechanical tubing products primarily to customers in the oil, gas, and petrochemical markets. The company also provides railroad services; and owns, develops, and manages various real estate assets. United States Steel Corporation was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.
|Name:||United States Steel Corporation|
United States Steel Corporation
600 Grant Street,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NYSE||X||Common Stock||New York Stock Exchange||US||USD||15. Apr 1991|
|DB||USX1||Common Stock||Deutsche Boerse AG||DE||EUR||15. Apr 1991|
|XTRA||USX1||Common Stock||XETRA Trading Platform||DE||EUR||15. Apr 1991|
|LSE||0LJ9||Common Stock||London Stock Exchange||GB||USD||15. Apr 1991|
|SNSE||X||Common Stock||Santiago Stock Exchange||CL||USD||15. Apr 1991|
|BMV||X *||Common Stock||Bolsa Mexicana de Valores||MX||MXN||15. Apr 1991|
|BOVESPA||USSX34||BDR EA REPR 1 COM SHS USD1||Bolsa de Valores de Sao Paulo||BR||BRL||24. Aug 2012|
|BASE||X||CEDEAR EACH REP 1/3 ORD||Buenos Aires Stock Exchange||AR||ARS||16. Feb 2011|
|Company Analysis updated:||2018/03/22 00:12|
|Last estimates confirmation:||2018/03/20|
|Last earnings update:||2017/12/31|
|Last annual earnings update:||2017/12/31|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.