I have created a three-stage DCF model to value more than 3000 stocks. The valuation was done with the following assumptions:
- Growth for the first 5 years - The lower of estimated 5-year growth rate or past 5-year sales growth rate
- Growth for the next 5 years - Half of the above mentioned rate
- Terminal growth rate of 2%
- Discount rates of 8%, 10%, 12%, 14%
The DCF valuation model is only feasible for companies with at least slightly predictable cash flow, it doesn't work well in cyclical or biotechnology sectors, or for companies undergoing rapid change. As estimating a discount rate for each company is more art than science, I have used several discount rates to show potential undervaluation/overvaluation. Only companies with a profit this year, or estimated profit next year were valued. As I used a general formula for all stocks, there might be some extremes due to their growth rates/estimated profits.
DOWNLOAD THE VALUATION OF MORE THAN 3000 STOCKS
Below are some notable examples with upside/downside based on various discount rates (8,10,12,14):
- Growth for the first 5 years - The lower of estimated 5-year growth rate or past 5-year sales growth rate
- Growth for the next 5 years - Half of the above mentioned rate
- Terminal growth rate of 2%
- Discount rates of 8%, 10%, 12%, 14%
The DCF valuation model is only feasible for companies with at least slightly predictable cash flow, it doesn't work well in cyclical or biotechnology sectors, or for companies undergoing rapid change. As estimating a discount rate for each company is more art than science, I have used several discount rates to show potential undervaluation/overvaluation. Only companies with a profit this year, or estimated profit next year were valued. As I used a general formula for all stocks, there might be some extremes due to their growth rates/estimated profits.
DOWNLOAD THE VALUATION OF MORE THAN 3000 STOCKS
Below are some notable examples with upside/downside based on various discount rates (8,10,12,14):
Ticker Name 8% 10% 12% 14%
| AAPL AMZN BAC BBL BHP BP BRK-A BTI BUD C CHL CMCSA COP CSCO CVX DIS FB GE GILD GOOGL GSK HD HSBC IBM INTC JNJ JPM KO MRK MSFT NVS ORCL PBR PEP PFE PG PM PTR QCOM RIO RY SAN SAP SLB SNY T TM TOT TSM UL UN UTX V VZ WFC WMT XOM | Apple Inc. Amazon.com Inc. Bank of America Corporation BHP Billiton plc BHP Billiton Limited BP plc Berkshire Hathaway Inc. British American Tobacco plc Anheuser-Busch InBev SA/NV Citigroup Inc. China Mobile Limited Comcast Corporation ConocoPhillips Cisco Systems, Inc. Chevron Corporation The Walt Disney Company Facebook, Inc. General Electric Company Gilead Sciences Inc. Google Inc. GlaxoSmithKline plc The Home Depot, Inc. HSBC Holdings plc IBM Intel Corporation Johnson & Johnson JPMorgan Chase & Co. The Coca-Cola Company Merck & Co. Inc. Microsoft Corporation Novartis AG Oracle Corporation Petroleo Brasileiro Pepsico, Inc. Pfizer Inc. The Procter & Gamble Company Philip Morris International, Inc. PetroChina Co. Ltd. QUALCOMM Incorporated Rio Tinto plc Royal Bank of Canada Banco Santander, S.A. SAP SE Schlumberger Limited Sanofi AT&T, Inc. Toyota Motor Corporation Total SA Taiwan Semiconductor Unilever plc Unilever NV United Technologies Corp. Visa Inc. Verizon Communications Inc. Wells Fargo & Company Wal-Mart Stores Inc. Exxon Mobil Corporation | 94% -34% 35% 9% 24% 44% 20% 14% 21% 53% -6% 75% 9% 45% 22% -7% 147% -3% 213% 75% 15% 2% -26% 44% 37% -2% 42% 5% 7% 18% 28% 99% 123% 11% 9% -16% 12% 34% 127% 48% 16% 14% 35% 56% 27% 10% 103% 107% 117% -6% 0% 1% 38% 33% 62% 22% 6% | 63% -46% 16% -7% 6% 23% 1% -3% 2% 31% -19% 47% -7% 24% 4% -21% 103% -17% 162% 46% -2% -13% -36% 24% 16% -16% 22% -11% -9% 0% 9% 68% 90% -6% -7% -28% -4% 15% 91% 27% -1% -2% 14% 31% 9% -5% 72% 75% 83% -20% -15% -14% 16% 13% 38% 4% -9% | 39% -55% 0% -20% -9% 6% -14% -17% -13% 13% -30% 24% -20% 6% -10% -32% 69% -28% 120% 23% -15% -25% -45% 7% -1% -28% 5% -24% -22% -14% -7% 43% 63% -20% -20% -38% -18% -1% 61% 10% -14% -15% -3% 11% -7% -18% 47% 49% 55% -31% -27% -25% -2% -3% 18% -11% -21% | 18% -62% -13% -31% -21% -8% -26% -28% -25% -1% -39% 6% -30% -8% -21% -41% 40% -37% 87% 5% -26% -35% -52% -7% -15% -37% -8% -35% -33% -26% -20% 22% 41% -31% -30% -46% -29% -14% 37% -5% -25% -26% -16% -5% -19% -29% 26% 29% 32% -41% -37% -35% -16% -16% 2% -23% -31% |
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