What is Coty's intrinsic value?

Since the intrinsic value calculations based on Discounted Cash Flow or Discounted Earnings cannot be applied to companies without consistent revenue and earnings. So we developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

Free Cash Flow is the money generated in a year which can be used to grow the business and pay dividends. With a company, the free cash flows are what is left for reinvestment.

Based on the 6 year free cash flow average, total equity and free cash flow growth assumptions, the following formula is applied:

Value = (Growth Multiple)*FCF(6 year avg) + 0.8*Total Equity(most recent)

The free cash flow growth assumptions translate into the Growth multiple in the above formula. In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = (Growth Multiple)*FCF(6 year avg) + Total Equity(most recent)/0.8

Add all the Free Cash Flow together and divide 6 will get Coty's Free Cash Flow (6 year avg): FCF = $147.84.

=> Value = 9.52*147.84+3697.1*0.8 = 4365.12 (USD)

Coty Intrinsic Value (Projected FCF Calculation) = Value / Shares Outstanding (Diluted Average) = 4365.12 / 787.700 = 5.54 (USD)

As of today (2021-12-10), The stock price of Coty is $10.15. Therefore, Coty's Price-to-Intrinsic-Value-Projected-FCF of today is:

Price-to-Intrinsic-Value-Projected-FCF = Share Price / Intrinsic Value = 10.15 / 5.54 = 1.83

During the past 12 years, the highest Price-to-Intrinsic-Value-Projected-FCF of Coty was 1.98, the lowest was 0.54, and the median was 1.25.

COTY's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than 66% of the 1189 Companies in the Consumer Packaged Goods industry (Industry Median: 1.27 vs. NYSE:COTY: 1.83)