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MCD less sharp as cashflow drifts lower
MCD Current 237 Target 258 + 9%
Jun 12, 2022
1 minute read
Sales declined -6%
Last 5 quarters
-4% 15% 5% -3% -6%
Costs up profit down
Last 5 quarters
-63% -61% -61% -65% -71%
Cashflow higher
Last 5 quarters million dollars
1,879, 1,319, 2,233, 1,545, 1,579
Balance sheet net cash worsened
Last 5 quarters million dollars
-55,319 -54,652 -54,096 -53,498 -54,533
Capital paid improved , a 9% higher target price
Last 5 quarters million dollars
31,295, 32,601, 33,529, 34,627, 38,457
Jun 12, 2022
1 minute read
Sales declined -6%
Last 5 quarters
-4% 15% 5% -3% -6%
- Sales declined -6% in the first quarter to 5,666 million dollars -4% below our 5,889 million dollars forecast.
- This brings the average to 3% growth.
- We predict average growth of 2% in this next 12 months to bring sales to 6,093 million dollars in the first quarter 2023.
Costs up profit down
Last 5 quarters
-63% -61% -61% -65% -71%
- The cash cost ratio went from -65% to -71% profit from 1,639 to 1,104 million dollars in the first quarter.
- The average cost ratio is at -65% now.
- We use the average -65% cost ratio to predict a 1,733 million dollars profit in the first quarter 2023.
Cashflow higher
Last 5 quarters million dollars
1,879, 1,319, 2,233, 1,545, 1,579
- Free cashflow went from 1,545 to 1,579 million dollars in the first quarter with -555 million dollars investment spending.
- Average quarterly Cashflow is at 1,669 million dollars now.
- We assume lower -474 million dollars investment spending which with higher sales gives slightly higher 1,689 million dollars Cashflow in the first quarter 2023.
Balance sheet net cash worsened
Last 5 quarters million dollars
-55,319 -54,652 -54,096 -53,498 -54,533
- Cash declined 4,709 to 2,336 million dollars in the first quarter.
- Liabilities declined 58,207 to 56,869 million dollars so net cash worsened -53,498 to -54,533 million dollars .
- With our forecast cashflow & a -5,080 million dollars equity payout -1,999 million dollars liabilities payment net cash will be -52,534 million dollars in 12 months time.
Capital paid improved , a 9% higher target price
Last 5 quarters million dollars
31,295, 32,601, 33,529, 34,627, 38,457
- MCD 29 quarter capital paid improved 34,627 38,457 million dollars in the first quarter with large -1,345 million dollars liabilities -2,486 million dollars equity payments & will be 45,536 million dollars in12 months time.
- At the current market value of 175,554 million dollars based on our forecasts it’s at 3.44 X assets with a 7 years payback & a 3% yield.
- Our cashflow forecast is 7,079 million dollars which means a 25 X valuation. A 27 X valuation gives a 9% higher target price 258 rupiah.