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MCD, average Cashflow heading to 2 billion dollars
Current 248 Target 288 +16%
January 29 2022
1 minute read
Sales declined -3%
Costs up profit down
Cashflow seasonally lower
Balance sheet lower leverage
Valuation, a 16% higher target price
1 minute read
Sales declined -3%
- Sales declined -3% in the fourth quarter to 6,009 million dollars vs our 6,077 million dollars forecast.
- This brings the quarterly average to 3% growth.
- We predict average growth of 4% in this next 12 months to bring sales to 6,969 million dollars in the fourth quarter of 2022.
Costs up profit down
- The cash cost ratio went from -61% to -65% profit from 2,150 to 1,639 million dollars seasonally in the fourth quarter.
- The average cost ratio is at -63% now.
- We use the average -63% cost ratio to predict a 2,319 million dollars profit in the fourth quarter of 2022.
Cashflow seasonally lower
- Free cashflow went from 2,233 to 1,545 million dollars in the fourth quarter with -1,122 million dollars investment Cashflow.
- Average quarterly Cashflow is at 1,744 million dollars now.
- We assume lower -502 million dollars investment spending which with higher sales gives a 2,103 million dollars Cashflow in the fourth quarter of 2022.
Balance sheet lower leverage
- Cash increased 4,306 to 4,709 million dollars in the fourth quarter.
- Liabilities declined slightly 58,402 to 58,207 million dollars so net cash improved -54,096 to -53,498 million dollars
- With our forecast cashflow & a -6,197 million dollars equity payout -1,792 million dollars liabilities payment net cash will be -51,706 million dollars in 12 months time.
Valuation, a 16% higher target price
- MCD capital paid from the last 28 quarters improved 33,529 to 34,627 million dollars in the third quarter with 660 million dollars new liabilities, a -1,799 million dollars equity payout & will be 42,615 million dollars in12 months time.
- At the current market value of 185,800 million dollars based on our forecasts it’s at 3.41 X assets with a 6 years payback & a 3% yield.
- Our cashflow forecast is 7,988 million dollars which means an 23 X valuation. A 27 X valuation gives a 16% higher target price of 288 dollars.