Altria Group, Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Wells Fargo Securities Bonnie Herzog bonnie.herzog@wellsfargo.com
Stifel Nicolaus Christopher R. Growe growec@stifel.com
RBC Capital Markets Nik Modi nik.modi@rbccm.com
Cowen & Company Vivien Azer vivien.azer@cowen.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form

Net Operating Profit Less Adjusted Taxes NOPLAT 5,611  5,877 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 5,581 3,602 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 276 255 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 25,457 38,557 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 22.04% 15.24% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv (1,120) 13,304 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR -19.96% 226.39% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket 31.80% 22.81% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook  7.12%  6.39%
Enterprise value
EVMarket  127,190 143,025 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  122,441  140,716
Long-Run Growth
g = IR x ROIC
-4.40%  34.50% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP  2.50%  2.50%
Margin from Operations M 45.78%  46.75% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D 2.54%  2.21% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution

12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

 6.75  7.40  34.24%  25.60%  32.82%  24.10%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

14.36 15.47 34.24% 25.60% 32.82% 24.10%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

22.67 24.34 34.24% 25.60% 32.82% 24.10%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

22.79 39.71 34.24% 25.60% 32.82% 24.10%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

14.73 15.82 34.24% 25.60% 32.82% 24.10%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

5.00 3.71 34.24% 25.60% 32.82% 24.10%

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