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TSN looking very SHARP with Cashflow rising above 1 billion dollars
Current 99 Target 139 +40%
February 8 2022
1 minute read
Sales grew 1%
Costs down profit down on lower non cash gains
Cashflow to 1 billion dollars
Balance sheet lower leverage
Valuation, a 40% higher target price
1 minute read
Sales grew 1%
- Sales grew 1% in the fourth quarter to 12,933 million dollars which is up 24% from a year ago.
- This brings the quarterly average to 6% growth.
- We predict average growth of 4% in this next 12 months to bring sales to 135,561 million dollars in the fourth quarter of 2022.
Costs down profit down on lower non cash gains
- The cash cost ratio went from -97% to -88% profit from 1,358 to 1,126 million dollars in the fourth quarter on lower non cash gains.
- The average cost ratio is at -91% now.
- We use the average -91% cost ratio to predict a 1,241 million dollars profit in the fourth quarter of 2022.
Cashflow to 1 billion dollars
- Free cashflow went from 834 to 1,024 million dollars in the fourth quarter with -408 million dollars investment Cashflow.
- Average quarterly Cashflow is at 640 million dollars now.
- We assume the same -408 million dollars investment spending which with higher sales gives a 946 million dollars Cashflow in the fourth quarter of 2022.
Balance sheet lower leverage
- Cash increased 2,507 to 2,956 million dollars in the fourth quarter.
- Liabilities declined 18,455 to 18,282 million dollars so net cash improved -15,948 to -15,326 million dollars.
- With our forecast cashflow & a -2,386 million dollars equity payout -1,208 million dollars liabilities payment net cash will be -14,118 million dollars in 12 months time.
Valuation, a 40% higher target price
- TSN capital paid from just the last 9 quarters improved 4,199 to 4,683 million dollars in the third quarter with -18 million dollars liabilities -466 million dollars equity payments & will be 8,277 million dollars in12 months time.
- At the current market value of 35,920 million dollars based on our forecasts it’s at 0.9 X assets with a 9 years payback & a 7% yield.
- Our cashflow forecast is 3,594 million dollars which means an 10 X valuation. A 14 X valuation gives a 40% higher target price of 139 dollars.