CONSUMER STAPLES
Daniel Brichler
Congqiong Liu
AGENDA
Sector Overview
 Recommendation
 Company Analysis

CVS Caremark Corporation
o Wal-Mart Stores,Inc
o Coca-Cola Company
o Molson Coors Brewing Company
o

Summary
SECTOR OVERVIEW
Companies that provides a product or service
that is essential
-Food, Beverages, pharmacies, hygiene
-Non-durable Household items and Consumer
Supercenters



Consumer staples tends to be less sensitive to
economic cycles
- BUY when economy declining
- SELL when economy increasing
Defensive Stocks and pay higher dividends
S&P500 VS SIM PORTFOLIO

We currently underweight in Consumer Staples
by 162 bps.
SIM
S&P 500
Telecommuni
cation
Services,
2.42%
Utilities,
Materials,
3.14%
3.51%
Consumer
Discretionary,
12.46%
Information
Techonology,
17.89%
Energy,
10.49%
Industrials,
10.73%
Health Care,
12.97%
Consumer
Staples,
10.09%
Financials,
16.30%
Telecommun
ication
Services,
2.11%
Materials,
2.90%
Utilities,
3.84%
Consumer
Discretionar
y, 14.33%
Consumer
Staples,
8.47%
Information
Techonology,
19.10%
Industrials,
8.95%
Health Care,
11.90%
Energy,
14.39%
Financials,
13.48%
RECOMMENDATIONS

Keep sector weighting at current SIM portfolio
level

Buy 394 basis points of Molson-Coors

Sell 394 basis points of Wal-Mart

Hold 466 basis points of CVS
COMPANY ANALYSIS
COCA-COLA
Recommendation: Do not Buy
COMPANY OVERVIEW


Coca-Cola is the
world’s largest
beverage company.
Coca-Cola own or
license and market
more than 500
nonalcoholic beverage
brands.





Ticker: KO
Current Price: $ 40.19
$177.41 B Market Cap
$193.31 B Enterprise
Value
Dividend Yield :2.8%
SEGMENTS OVERVIEW

Coca-Cola Company markets, manufactures and
sells:
- Beverage concentrates and syrup
- Finished sparkling and still beverage
lines of Coca-Cola
Business
Earnings by line of
Coca-Cola Business
Concentrate
operation
30%
38%
70%
Finished
product
operation
62%
Concentrate
operation
Finished product
operation
SEGMENTS OVERVIEW

As of December 31, 2012, the Company’s operating
structure included the following operating segments:

Eurasia and Africa

Europe, Latin America

North America

Pacific,

Bottling Investments and Corporate
SEGMENTS PERFORMANCE
5 YEARS STOCK PERFORMANCE
MULTIPLES VALUATION
Relative to Industry
High
Low
Median
Current
P/Trailing E
1.1
0.92
1.0
1.0
P/Forward E
1.1
0.92
1.0
1.0
P/B
1.4
0.8
1.1
1.0
P/S
2.4
2.5
1.9
1.6
P/CF
1.5
1.0
1.2
1.1
Relative to S&P 500
High
Low
Median
Current
P/Trailing E
1.6
0.95
1.2
1.2
P/Forward E
1.5
0.9
1.2
1.2
P/B
3.3
1.9
2.3
2.3
P/S
4.3
2.5
3.3
2.5
P/CF
2.1
1.3
1.7
1.5
MULTIPLES VALUATION
Absolute Valuation
High
Low
Median
P/Forward E
P/S
P/B
P/EBITDA
P/CF
24.6
6.4
9.7
19.34
23.4
13.1
2.9
4.4
8.82
11.1
18.4
4.4
5.8
12.93
16.3
Current #Your
Target
Multiple
17.7
18.4
3.6
4.4
5.2
5.8
11.91
12.93
15.4
16.3
*Target E, S Target
per Share Price
2.27
11.14
$ 41.76
$ 49.01
SENSITIVITY VALUATION
$42.15
8.50%
8.75%
9%
9.25%
9.50%
9.75%
10%
10.25%
10.50%
2.50%
45.93
43.99
42.20
40.54
39.00
37.57
36.24
34.99
33.83
2.75%
47.21
45.14
43.24
41.48
39.86
38.36
36.96
35.65
34.43
3%
48.60
46.39
44.37
42.51
40.79
39.20
37.73
36.35
35.08
3.25%
50.13
47.76
45.60
43.61
41.79
40.11
38.55
37.11
35.76
3.50%
51.82
49.26
46.94
44.82
42.87
41.09
39.44
37.92
36.50
3.75%
53.68
50.91
48.40
46.13
44.05
42.15
40.40
38.79
37.30
4%
55.74
52.73
50.02
47.57
45.34
43.31
41.44
39.73
38.15
4.25%
58.05
54.75
51.80
49.15
46.75
44.57
42.58
40.75
39.07
4.50%
60.65
57.02
53.79
50.90
48.30
45.95
43.81
41.86
40.07
DCF VALUATION-REVENUE
EKOCENTER
 PlantBottle Technology with Ford

DCF VALUATION
Coca-Cola
Terminal Discount Rate =
Terminal FCF Grow th =
Year
2013E
9.75%
3.75%
2014E
2015E
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
49,212
50,222
2.05%
52,000
3.54%
53,841
4.00%
55,995
4.50%
58,514
4.75%
61,294
4.75%
64,205
4.50%
67,094
4.25%
69,946
3.95%
72,709
3.75%
10,886
22.12%
11,514
22.93%
12,084
23.24%
13,460
25.00%
13,999
25.00%
14,629
25.00%
15,323
25.00%
16,051
25.00%
17,445
26.00%
18,186
26.00%
18,904
26.00%
1,086
2.21%
1,147
2.28%
1,442
2.77%
1,400
2.60%
1,456
2.60%
1,521
2.60%
1,594
2.60%
1,669
2.60%
1,744
2.60%
1,819
2.60%
1,890
2.60%
2,753
23.00%
2,912
23.00%
3,111
23.00%
3,418
23.00%
3,555
23.00%
3,714
23.00%
3,891
23.00%
4,076
23.00%
4,413
23.00%
4,601
23.00%
4,783
23.00%
9,154
9,678
5.73%
10,342
6.86%
11,442
10.64%
11,900
4.00%
12,435
4.50%
13,026
4.75%
13,645
4.75%
14,776
8.29%
15,404
4.25%
16,012
3.95%
Capex % of sales
2,011
4.09%
819.36
1.66%
2,880
5.85%
2,114
4.21%
532.52
1.06%
2,973
5.92%
2,231
4.29%
71.12
0.14%
3,084
5.93%
2,315
4.30%
570.71
1.06%
3,123
5.80%
2,436
4.35%
593.54
1.06%
3,248
5.80%
2,604
4.45%
620.25
1.06%
3,394
5.80%
2,752
4.49%
649.71
1.06%
3,555
5.80%
2,896
4.51%
680.58
1.06%
3,531
5.50%
3,133
4.67%
711.20
1.06%
3,690
5.50%
3,357
4.80%
741.43
1.06%
3,847
5.50%
3,526
4.85%
770.71
1.06%
3,999
5.50%
Free Cash Flow
9,104
9,352
2.72%
9,560
2.23%
11,205
17.21%
11,682
4.25%
12,266
5.00%
12,873
4.95%
13,690
6.35%
14,930
9.06%
15,655
4.86%
16,310
4.18%
Revenue
% Grow th
Operating Income
Operating Margin
Interest
Interest % of Sales
Taxes
Tax Rate
Net Income
% Grow th
Add Depreciation/Amort
% of Sales
Plus/(minus) Changes WC
% of Sales
Subtract Cap Ex
% Grow th
NPV of Cash Flow s
NPV of terminal value
Projected Equity Value
Free Cash Flow Yield
Current P/E
Projected P/E
Current EV/EBITDA
Projected EV/EBITDA
Implied equity value/share
Upside/(Dow nside) to DCF
Debt
Cash
Cash/share
40.43%
59.57%
100.00%
19.45
20.40
15.08
15.75
18.40
19.29
14.27
14.91
4430
Shares Outstanding
Current Price
$75,496.27
111236.3645
$186,732.64
5.11%
$
40.19
$42.15
4.88%
35,690
19,260
4.35
Terminal Value
17.22
18.06
13.59
14.19
282,028
Free Cash Yield
5.78%
Terminal P/E
18
Terminal EV/EBITDA
13.31
DCF VALUATION AN& RECOMMENDATION
Current Price : 40.19
 Target Price: 42.15
 Upside: 4.88%


Recommendation : HOLD – long-term Investors
DO NOT BUY- SIM Portfolio
MOLSON COORS
Recommendation: BUY
COMPANY OVERVIEW


The fifth largest brewer in
the world.
It has a diverse portfolio of
owned and partner brands
.

Geography Segment





Canada
United States
Central Europe
United kingdom
International

Ticker: TAP

Current Price: $53.98

Mkt Cap: $ 9.92B

EV: $13.44B

Dividend Yield: 2.4%
BUSINESS ANALYSIS
Drivers



Diversified brand
portfolio
leading market position
Partnership and
Acquisition
Risks


Raw material price
increasing
Currency fluctuations
5 YEARS STOCK PERFORMANCE
MULTIPLE ANALYSIS
Relative to Industry
P/Trailing E
P/Forward E
P/B
P/S
P/CF
High
1.2
1.2
1.4
1.3
1.7
absolute valuation
P/Trailing E
P/Forward E
P/B
P/S
P/CF
Low
Median Current Relaive to S&P 500
0.61
1
1 P/Trailing E
0.61
1
1 P/Forward E
0.2
0.3
1 P/B
0.2
0.7
1.2 P/S
0.4
1
1 P/CF
High
20.6
3
2.2
10.15
12
Low
10.5
0.5
0.9
3.44
4.9
High
1.4
1.3
0.9
2.8
1.6
Median
12.9
1.4
1.2
7.2
8.5
Low Median Current
0.59
0.89
0.82
0.62
0.89
0.83
0.3
0.5
0.4
0.3
1.2
1.3
0.4
0.9
0.9
Current
12
1.9
1.1
6.67
8.7
DCF VALUATION
Terminal Discount Rate =
TAP
Year
Revenue
Terminal FCF Grow th =
2013E
2014E
2015E
2016E
2017E
2018E
2019E
2020E
2021E
2022E
2023E
4200.00
4512.00
7.43%
4810.00
6.60%
5098.60
6.00%
5404.52
6.00%
5701.76
5.50%
6015.36
5.50%
6316.13
5.00%
6631.94
5.00%
6963.53
5.00%
7242.07
4.00%
1071.00
25.50%
1128.00
25.00%
1202.50
25.00%
1172.68
23.00%
1243.04
23.00%
1311.41
23.00%
1383.53
23.00%
1452.71
23.00%
1525.35
23.00%
1601.61
23.00%
1665.68
23.00%
(111.50)
2.65%
(120.08)
2.66%
(122.02)
2.54%
(132.56)
2.60%
(140.52)
2.60%
(148.25)
2.60%
(156.40)
2.60%
(164.22)
2.60%
(172.43)
2.60%
(181.05)
2.60%
(188.29)
2.60%
(232.95)
26%
(244.50)
26%
(262.25)
26%
(270.43)
26%
(286.66)
26%
(302.42)
26%
(319.05)
26%
(335.01)
26%
(351.76)
26%
(369.35)
26%
(384.12)
26%
687.08
720.83
4.91%
772.67
7.19%
769.68
-0.39%
815.87
6.00%
860.74
5.50%
908.08
5.50%
953.48
5.00%
1001.16
5.00%
1051.21
5.00%
1093.26
4.00%
292.00
6.95%
(180.42)
4.30%
(239.00)
5.69%
313.58
6.95%
(136.11)
3.02%
(257.18)
5.70%
334.30
6.95%
(53.22)
1.11%
(274.17)
5.70%
354.35
6.95%
(101.97)
2.00%
(290.62)
5.70%
375.61
6.95%
(108.09)
2.00%
(308.06)
5.70%
396.27
6.95%
(114.04)
2.00%
(325.00)
5.70%
418.07
6.95%
(120.31)
2.00%
(342.88)
5.70%
438.97
6.95%
(126.32)
2.00%
(360.02)
5.70%
460.92
6.95%
(132.64)
2.00%
(378.02)
5.70%
483.97
6.95%
(139.27)
2.00%
(396.92)
5.70%
503.32
6.95%
(144.84)
2.00%
(412.80)
5.70%
559.66
641.12
14.56%
779.57
21.59%
731.45
-6.17%
775.33
6.00%
817.98
5.50%
862.96
5.50%
906.11
5.00%
951.42
5.00%
998.99
5.00%
1038.95
4.00%
$4,919.37
6124.787023
$11,044.16
5.64%
45%
55%
100%
Terminal Value
16623.17
Free Cash Yield
6.25%
Terminal P/E
15.21
14.43
16.07
10.04
10.87
13.76
15.32
9.49
10.28
Terminal EV/EBITDA
9.40
% Grow th
Operating Income
Operating Margin
Interest
Interest % of Sales
Taxes
Tax Rate
Net Income
% Grow th
Add Depreciation/Amort
% of Sales
Plus/(minus) Changes WC
% of Sales
Subtract Cap Ex
Capex % of sales
Free Cash Flow
% Grow th
NPV of Cash Flow s
NPV of terminal value
Projected Equity Value
Free Cash Flow Yield
Current P/E
Projected P/E
Current EV/EBITDA
Projected EV/EBITDA
Shares Outstanding
Current Price
Implied equity value/share
Upside/(Dow nside) to DCF
Debt
Cash
Cash/share
10.50%
4.00%
183.44
54.06
$60.21
11.37%
4570
801.6
4.37
12.83
14.29
8.91
9.64
RECOMMENDATION

Current Price:$54.05

Target Price: $ 60.21

Upside: 11.57%

Recommendation : BUY
CVS CAREMARK
Recommendation: BUY
OVERVIEW

Three segments of business



Retail Pharmacy
Pharmacy Services
Corporate Segment

220,000 Employees

7,500 + stores

550 MinuteClinics
KEY DRIVERS

Pharmacy Service Segment

Medicare Part D

Competitive Advantages

Defensive Stock

Affordable Health Care Act (Obamacare)
COMPETITIVE ADVANTAGE
EARNINGS ANNOUNCEMENT



Full-year Adjusted EPS range to $3.94 to $3.97,
excluding the gain from a legal settlement
Operating profit increased 19.2% to
approximately $2.2 billion
Adjusted EPS of $1.05, excluding the gain from a
legal settlement, an increase of 23.9%
ECONOMIC ANALYSIS
Consumer Spending
Retail Sales vs. CVS
FINANCIAL ANALYSIS
Operating Results
Net Sales
Consensus
Net Sales Change
Gross Margin
Gross Profit
Operating Expenses
% of Total Sales
Operating Income
% of Total Sales
Interest Expense
% of Total Sales
Total Operating Income
% of Total Sales
Income Tax Rate
Total Income Tax
After-Tax Net Income
% of Total Sales
Dilutted Share Count
Dilutted EPS
Consensus
2015
$ 159,287.80
$ 136,669.52
6.00%
18.80%
$ 29,946.11
$ 20,894.67
13.12%
$ 9,051.44
5.68%
$
660.27
0.41%
$ 8,391.17
5.27%
38.61%
$ 3,239.42
$ 5,151.75
3.23%
1050
$
4.91
$
5.10
2014
$ 150,271.51
$ 131,413.00
8.00%
18.45%
$ 27,725.09
$ 18,824.02
12.53%
$ 8,901.07
5.92%
$
622.89
0.41%
$ 8,278.18
5.51%
38.61%
$ 3,195.80
$ 5,082.38
3.38%
1130
$
4.50
$
4.47
2013
$ 139,140.29
$ 126,191.00
13.00%
18.28%
$ 25,431.78
$ 16,958.58
12.19%
$ 8,473.20
6.09%
$
587.64
0.42%
$ 7,885.57
5.67%
38.61%
$ 3,044.23
$ 4,841.34
3.48%
1219
$
3.97
$
3.96
2012
2011
2010
2009
2008
$ 123,133.00 $ 107,100.00 $ 95,778.00 $ 98,729.00 $ 87,472.00
$
$
$
$
$
$
$
$
14.97%
18.28%
22,506.00
15,278.00
12.41%
7,228.00
5.87%
557.00
0.45%
6,323.00
5.14%
38.61%
2,441.00
3,882.00
3.15%
1290
3.01
$
$
$
$
$
$
$
$
11.82%
19.20%
20,561.00
14,231.00
13.29%
6,330.00
5.91%
584.00
0.55%
5,746.00
5.37%
39.30%
2,258.00
3,488.00
3.26%
1347
2.59
$
$
$
$
$
$
$
$
-2.99%
21.11%
20,219.00
14,062.00
14.68%
6,137.00
6.41%
536.00
0.56%
5,601.00
5.85%
38.90%
2,179.00
3,422.00
3.57%
1377
2.49
$
$
$
$
$
$
$
$
12.87%
20.64%
20,380.00
13,942.00
14.12%
6,438.00
6.52%
525.00
0.53%
5,913.00
5.99%
37.29%
2,205.00
3,708.00
3.76%
1450
2.56
$
$
$
$
$
$
$
$
14.60%
20.91%
18,290.00
12,224.00
13.97%
6,046.00
6.91%
509.00
0.58%
5,537.00
6.33%
39.61%
2,193.00
3,344.00
3.82%
1469
2.28
DCF ANALYSIS
Year
Revenue
% Grow th
Operating Income
Operating Margin
2013E
139,140
13.00%
8,473
2014E
150,272
8.00%
8,901
2015E
159,288
6.00%
9,051
2016E
166,456
4.50%
9,566
173,946
4.50%
10,116
Terminal FCF Growth =
2.00%
2018E
181,774
4.50%
10,704
189,954
4.50%
11,334
198,502
4.50%
12,010
Interest Expense
588
623
660
713
770
832
907
988
Interest % of Sales
0.4%
0.4%
0.4%
0.43%
0.44%
0.46%
0.48%
0.50%
38.0%
3,196
38.0%
Net Income
6,017
6,328
Free Cash Flow
6,034
6,411
% Grow th
5.89%
NPV of Cash Flows
49,879
NPV of terminal value
52,449
51%
Projected Equity Value
102,328
100%
Free Cash Flow Yield
Current P/E
Projected P/E
Shares Outstanding
38.0%
6,472
6,679
4.00%
13.4
13.1
16.2
15.8
$ 65.53
$ 79.32
21.05%
4.50%
12,737
6.14%
1,087
0.52%
216,769
4.50%
13,519
6.24%
1,196
0.55%
2023E
226,523
4.50%
14,362
6.34%
1,315
0.58%
3,364
3,551
3,751
3,962
4,188
4,427
4,683
4,958
38.00%
38.00%
38.00%
38.00%
38.00%
38.00%
38.00%
38.00%
6,915
7,334
7,784
8,278
8,810
9,397
7,058
5.37%
7,486
5.71%
7,936
5.67%
8,421
5.76%
8,932
9,482
5.72%
5.81%
10,032
10,062
5.76%
Free Cash Yield
17.0
Implied equity value/share
207,434
2022E
Terminal Value
14.1
1,290.0
6.05%
2021E
10,720
10,670
5.70%
49%
7.14%
Current Price
UPSIDE
3,239
5.97%
2020E
5.7%
3,044
5.89%
2019E
5.9%
Tax Rate
5.82%
10.00%
6.1%
Taxes
5.75%
2017E
Terminal Discount Rate =
136,038
7.84%
Terminal P/E
12.7
Terminal EV/EBITDA
8.0
MULTIPLES VALUATION
RECOMMENDATION

Current Weighting 4.66%

Target Price $75.45 (18.30% Upside)

Average between DCF and Multiples

Hold

Already have a significant amount in CVS

Lots of upside has already happened
WAL-MART
Recommendation: Sell
OVERVIEW
Wal-Mart is the largest retailer on the planet
 Wal-Mart divides its business into three
segments

Wal-Mart U.S.
 Wal-Mart International
 Sam’s Club


The stores sell groceries, home goods, medicines,
clothing, electronics, furniture, etc.
KEY DRIVERS

Consumer Spending

International Segment

Distribution centers

Low-Cost Retailer

Smaller U.S. Stores
EARNINGS ANNOUNCEMENT
Walmart U.S. comp sales declined 0.3 percent in
the 13-week period ended Oct. 25, 2013.
 Walmart International grew net sales to $33.1
billion.


.01% growth from 2nd quarter
Consolidated net sales reached $114.9 billion, an
increase of $1.8 billion, or 1.6 percent, led by
Walmart U.S. with $67.7 billion in net sales.
 Sluggish earnings and sales growth

ECONOMIC ANALYSIS
Consumer Spending
Retail Sales vs. WMT
FINANCIAL ANALYSIS
Operating Results
Net Sales
2015
$ 497,716.58
Consensus
$ 502,137.00
Net Sales Change
3.98%
Walmart U.S.
$ 276,253.59
% of Total Sales
55.50%
Walmart International $ 160,776.21
% of Total Sales
32.30%
Sam's Club
$ 60,686.78
% of Total Sales
12.19%
Net Sales Increase
3.98%
Gross Profit Margin
27.47%
Gross Profit
$ 136,738.30
SG&A Expense
$ 94,566.15
2014
$ 478,648.48
$ 481,142.00
3.89%
$ 272,171.02
56.86%
$ 148,180.84
30.96%
$ 58,296.62
12.18%
3.89%
26.42%
$ 126,461.79
$ 90,943.21
2013
$ 460,721.59
$ 469,162.00
3.80%
$ 268,148.79
58.20%
$ 136,572.21
29.64%
$ 56,000.60
12.15%
3.80%
25.43%
$ 117,166.40
$ 87,537.10
2012
2011
2010
2009
2008
$ 443,854.00 $ 418,952.00 $ 405,132.00 $ 401,244.00 $ 374,307.00
5.94%
$ 264,186.00
59.52%
$ 125,873.00
28.36%
$ 53,795.00
12.12%
5.94%
24.50%
$ 108,744.23
$ 84,332.26
3.41%
$ 260,261.00
62.12%
$ 109,232.00
26.07%
$ 49,459.00
11.81%
3.41%
24.80%
$ 103,900.10
$ 79,600.88
0.97%
$ 259,919.00
64.16%
$ 97,407.00
24.04%
$ 47,806.00
11.80%
0.97%
24.90%
$ 100,877.87
$ 76,975.08
7.20%
$ 255,745.00
63.74%
$ 98,645.00
24.58%
$ 46,854.00
11.68%
7.20%
24.30%
$ 97,502.29
$ 76,236.36
8.57%
$ 239,529.00
63.99%
$ 90,421.00
24.16%
$ 44,357.00
11.85%
8.40%
24.10%
$ 90,207.99
$ 71,118.33
Operating Income
Walmart U.S.
% of Total Sales
Walmart International
% of Total Sales
Sam's Club
% of Total Sales
Other
% of Total Sales
Interest Expense
Total Operating Income
$ 29,853.73
$ 23,371.32
4.70%
$ 6,457.27
1.30%
$ 1,887.88
0.38%
$ (1,862.73)
-0.37%
$ 2,574.12
$ 27,279.62
$ 28,707.86
$ 22,323.61
4.66%
$ 6,375.14
1.33%
$ 1,880.22
0.39%
$ (1,871.11)
-0.39%
$ 2,372.46
$ 26,335.40
$ 27,609.99
$ 21,322.88
4.63%
$ 6,294.05
1.37%
$ 1,872.59
0.41%
$ (1,879.54)
-0.41%
$ 2,196.72
$ 25,413.27
$ 26,558.00
$ 20,367.00
4.59%
$ 6,214.00
1.40%
$ 1,865.00
0.42%
$ (1,888.00)
-0.43%
$ 2,034.00
$ 24,524.00
$ 25,547.00
$ 19,919.00
4.75%
$ 5,606.00
1.34%
$ 1,711.00
0.41%
$ (1,689.00)
-0.40%
$ 1,965.87
$ 23,581.13
$ 24,003.00
$ 19,314.00
4.77%
$ 4,901.00
1.21%
$ 1,515.00
0.37%
$ (1,727.00)
-0.43%
$ 1,787.00
$ 22,216.00
$ 23,289.00
$ 18,763.00
4.68%
$ 4,940.00
1.23%
$ 1,610.00
0.40%
$ (2,024.00)
-0.50%
$ 1,644.04
$ 21,644.96
$ 22,055.00
$ 17,516.00
4.68%
$ 4,725.00
1.26%
$ 1,618.00
0.43%
$ (1,804.00)
-0.48%
$ 1,512.52
$ 20,542.48
Income Tax Rate
0.32
Total Income Tax
$ 8,729.48
After-Tax Net Income
$ 18,550.14
% of Total Sales
3.73%
Dilutted Share Count
3225
Dilutted EPS
$
5.75
Consensus
$
5.73
0.31
$ 8,163.97
$ 18,171.43
3.80%
3300
$
5.51
$
5.22
0.31
0.326
0.322
0.324
0.342
0.342
$ 7,878.11 $ 7,994.82 $ 7,593.12 $ 7,197.98 $ 7,402.58 $ 7,025.53
$ 17,535.15 $ 16,529.18 $ 15,988.01 $ 15,018.02 $ 14,242.38 $ 13,516.95
3.81%
3.72%
3.82%
3.71%
3.55%
3.61%
3388
3473
3673
3874
3951
4045
$
5.18 $
4.76 $
4.35 $
3.88 $
3.60 $
3.34
$
5.02
DCF ANALYSIS
Year
Revenue
% Grow th
Operating Income
Operating Margin
Interest Expense
Interest % of Sales
Taxes
Tax Rate
Net Income
2013E
463,363
4.40%
27,610
2014E
484,038
4.46%
28,708
30,737
547,249
4.00%
31,647
569,139
4.00%
32,584
2019E
591,904
4.00%
33,548
2020E
615,581
2021E
640,204
4.00%
34,542
4.00%
35,564
2022E
665,812
4.00%
36,617
2023E
692,445
4.00%
37,700
5.67%
5.61%
5.56%
5.50%
5.44%
(2,197)
(2,372)
(2,574)
(2,574)
(2,574)
(2,574)
(2,574)
(2,574)
(2,574)
(2,574)
(2,574)
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.5%
-0.4%
-0.4%
-0.4%
-0.4%
-0.4%
7,878
31.0%
8,164
31.0%
43%
57%
Projected Equity Value
287,011
100%
8,729
32.0%
18,550
4.95%
15.1
14.8
16.4
15.8
15.5
7.7
7.4
7.2
8.0
7.7
7.5
3,473.0
$ 79.22
Implied equity value/share
$ 82.64
4.32%
9,012
32.0%
19,151
9,303
32.0%
19,770
9,603
32.0%
20,407
9,912
32.0%
21,063
10,230
10,557
32.0%
21,738
32.0%
22,433
10,894
32.0%
11,240
32.0%
23,149
23,886
Terminal Value
388,075
Free Cash Yield
15.7
Current Price
UPSIDE
4.00%
2018E
5.73%
163,927
Shares Outstanding
526,201
2017E
5.78%
123,084
Projected EV/EBITDA
2016E
5.84%
NPV of terminal value
Current EV/EBITDA
29,854
2.50%
5.9%
NPV of Cash Flows
Projected P/E
4.53%
Terminal FCF Growth =
5.9%
18,171
Current P/E
505,962
9.00%
6.0%
17,535
Free Cash Flow Yield
2015E
Terminal Discount Rate =
6.34%
Terminal P/E
16.2
Terminal EV/EBITDA
7.9
RATIO ANALYSIS
Absolute
Valuation
High
Low
Median
Current
#Your
Target
Multiple
*Target E, Target Price
S, B,
EBITA,
CF per
Share
P/Forward E
15.8
11.2
13.4
14.4
15.1
5.18
78.22
P/S
.6
.4
.5
.5
.5
137
68.5
P/EBITDA
8.05
5.68
6.71
6.80
7.3
9
65.7
P/CF
12
8.4
9.7
10.0
11.25
6.5
73.125
Target Price
71.38
RECOMMENDATION

Current weighting 3.94%

Target Price $80.34



More weight place on DCF
Sell
Wal-Mart seems to be fairly valued and may
have sluggish growth into the future
SUMMARY




Coke is a good long-term investment but seems to
be not have great upside (Do nothing)
Molson-Coors has good earnings potential (Buy
394 basis points)
CVS has excellent forecasted revenues with a
18% upside (Hold already heavily invested)
Wal-Mart fairly valued may have sluggish
growth
QUESTIONS?
Thank you for your time