United Natural Foods (UNFI:NAS) Fundamental Valuation Report

Fundamental Valuation Report

United Natural Foods(UNFI:NAS)

Consumer Defensive:Food Distribution

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$21.85 (USD) 30/10/2018

Weighted Valuation
$37.50 (USD)

Overall Rating
Undervalued by 71.6%

Valuation Models Analyst Consensus: $37.50 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (UNFI:NAS USD)

Price 21.85
Range 21.33 – 22.10
52 week 21.85 – 52.49
Open 21.50
Vol / Avg. 1.88M/1.34M
Mkt cap 1.1B
P/E 6.70
Div/yield 0.00/0.00
EPS 3.26
Shares 50.42M
Beta 1.36

Company Description

United Natural Foods is a wholesale distributor of natural, organic and specialty foods and nonfood products across North America. The company’s products consist of national, regional and private label brands grouped into grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and foodservice products, and personal care items. United Natural Foods serves various retail formats including conventional supermarket chains, natural product superstores, independent retail operators and food service channels such as e-commerce platforms. The company’s operations are comprised of three principal divisions: the wholesale division; the retail division; and the manufacturing and branded products division.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for UNFI:NAS

Using a discounted cash flow model we generated an intrinsic value of $74.56 (USD) for UNFI:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

UNFI:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $74.56 1% 5% 1% 5%
WACC (or Ke) 8.05 $96.11 $60.13
Terminal Growth Rate 3.00 $61.25 $94.43
Tax Rate 0.22 $81.80 $67.32
Cash Flow 404,596,085 $68.93 $80.18
Capital Expenditures 1,534,000 $74.58 $74.54
Long Term Debt 600,112,000 $75.15 $73.96

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $51.35 (USD) for UNFI:NAS. We also generated a valuation of $40.97 (USD) using other metrics and comparables.
The comparable companies were Core-Mark Holding Co (CORE:NAS) and Performance Food Group (PFGC:NYS).

Company UNFI:NAS End Date Value
Earnings/Share $3.26 (USD)
Book Value/Share $36.61 (USD)
Sales/Share $201.17 (USD)
Cash Flow/Share $2.15 (USD)
EBITDA/Share $6.23 (USD)
Price Based on Comps Adjustment Factor (%)
$104.40 (USD) 11.2
$108.59 (USD) -11.7
$29.52 (USD) 25.3
$14.06 (USD) 0.0
$95.85 (USD) 36.9
UNFI:NAS Ratios Used Average Values CORE:NAS PFGC:NYS
9.19 PE Ratio 32.02 46.52 17.53
0.82 PB Ratio 2.97 2.85 3.09
0.15 PS Ratio 0.15 0.10 0.20
13.91 PCF Ratio 9.82 10.15 9.49
5.83 EV to EBITDA 15.38 18.57 12.18


Using a multiples approach we generated a valuation of  $47.94 (USD) for UNFI:NAS

Company UNFI:NAS End Date Value
Earnings/Share $3.26 (USD)
Book Value/Share $36.61 (USD)
Sales/Share $201.17 (USD)
Cash Flow/Share $2.15 (USD)
EBITDA/Share $6.23 (USD)
Price Based on Comps Adjustment Factor
$54.75 (USD) 0
$51.41 (USD) 0
$50.83 (USD) 0
$27.80 (USD) 0
$54.90 (USD) 0
Ratios Ratio Average
PE Ratio 16.79
PB Ratio 1.40
PS Ratio 0.25
PCF Ratio 12.91
EV to EBITDA 8.81

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  UNFI:NAS for the last 10 years was  1.43

We ran the Adjusted Book Value for  UNFI:NAS and generated a book value of  $36.62 (USD)
By multiplying these we get an adjusted valuation of  $52.50 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for UNFI:NAS. The 4 analysts have a concensus valuation for UNFI:NAS for 2019 of $37.50 (USD).

UNFI:NAS United Natural Foods

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 4 1 3.0000 Hold 2018-10-29

Current Price: 21.85 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 3.42 3.50 3.71
# EPS Analysts 5 4 1
Mean Revenue 22,150.40 24,213.00
# Revenue Analysts 2 2
Mean Target Price 37.50
Mean Cash Flow 0.56
Mean EBITDA 347.20 351.10
Mean Net Income 159.20 159.10
Mean Debt Outstanding
Mean Tax Rate 27.50 28.00
Mean Growth Rate 5.00
Mean Capital Expenditure 102.60

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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