Nomad Foods (NOMD:NYS) Fundamental Valuation Report

Nomad Foods (NOMD:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Nomad Foods(NOMD:NYS)

Consumer Defensive:Packaged Foods

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

Close Price/Date
23.70 (EUR) / $28.74 (USD) 05/07/2021

Weighted Valuation
24.38 (EUR) / $29.57 (USD)

Use a conversion rate of 1.2129 from EUR to USD.

Overall Rating
Fairly valued to slightly Undervalued by 2.9%

Valuation Models Multiples: 22.88 (EUR) / $27.75 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation
According to Analyst consensus at $30.79 this stock is Undervalued

Company Overview (NOMD:NYS USD)

Price 28.74
Range 28.62 – 29.27
52 week 20.62 – 29.43
Open 28.98
Vol / Avg. 508800/594192
Mkt cap 5.07B
P/E 21.00
Div/yield 0.00/0.00
EPS 1.14
Shares 176.35M
Beta 0.66

Company Description

Nomad Foods Ltd is a packaged foods company which is involved in the business of manufacturing and distribution of branded frozen foods in Western Europe. The company manufactures and markets frozen food products such as fish, vegetables, poultry, and ready meals. It sells its products primarily through large grocery retailers under the brand Birds Eye in the United Kingdom and Ireland, Findus in Italy, France, Spain and Scandinavia and Iglo in Germany and other continental markets. The company operates through a single segment being Frozen. The majority of the revenue is generated from the United Kingdom.

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 NOMD:NYS

Using a discounted cash flow model we generated an intrinsic value of 43.07 (EUR) / $52.24 (USD) for NOMD:NYS

Sensitivity Analysis

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

NOMD:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $52.24 1% 5% 1% 5%
WACC (or Ke) 4.42 $70.56 $40.67
Terminal Growth Rate 0.00 $41.66 $69.00
Tax Rate 0.24 $56.12 $48.35
Cash Flow 626,800,000 $49.19 $55.29
Capital Expenditures -22,200,000 $52.14 $52.34
Long Term Debt 1,788,484,320 $52.75 $51.73

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of 40.18 (EUR) / $48.74 (USD) for NOMD:NYS. We also generated a valuation of 39.47 (EUR) / $47.87 (USD) using other metrics and comparables.
The comparable companies were Hostess Brands (TWNK:NAS), Freshpet (FRPT:NAS), Pilgrims Pride (PPC:NAS), J&J Snack Foods (JJSF:NAS) and Hain Celestial Group (HAIN:NAS).

Company NOMD:NYS End Date Value
Earnings/Share 1.14 (EUR) / $1.38 (USD)
Book Value/Share 11.94 (EUR) / $14.48 (USD)
Sales/Share 12.59 (EUR) / $15.27 (USD)
Cash Flow/Share 2.29 (EUR) / $2.77 (USD)
EBITDA/Share 2.17 (EUR) / $2.63 (USD)
Price Based on Comps Adjustment Factor (%)
43.54 (EUR) / $52.81 (USD) 0.0
49.52 (EUR) / $60.07 (USD) -65.5
24.41 (EUR) / $29.60 (USD) 0.0
39.44 (EUR) / $47.84 (USD) 0.0
69.79 (EUR) / $84.64 (USD) 13.5
NOMD:NYS Ratios Used Average Values TWNK:NAS FRPT:NAS PPC:NAS JJSF:NAS HAIN:NAS
21.00 PE Ratio 539.83 30.78 0.00 45.60 1869.44 213.47
1.99 PB Ratio 4.15 1.27 10.59 2.16 3.94 2.79
1.88 PS Ratio 5.76 1.97 21.06 0.48 3.32 1.98
10.36 PCF Ratio 95.51 12.59 395.62 10.57 41.78 16.98
12.97 EV to EBITDA 123.17 16.16 487.33 12.50 60.59 39.29

Multiples

Using a multiples approach we generated a valuation of  22.88 (EUR) / $27.75 (USD) for NOMD:NYS

Company NOMD:NYS End Date Value
Earnings/Share 1.14 (EUR) / $1.38 (USD)
Book Value/Share 11.94 (EUR) / $14.48 (USD)
Sales/Share 12.59 (EUR) / $15.27 (USD)
Cash Flow/Share 2.29 (EUR) / $2.77 (USD)
EBITDA/Share 2.17 (EUR) / $2.63 (USD)
Price Based on Comps Adjustment Factor
24.09 (EUR) / $29.22 (USD) 0
17.25 (EUR) / $20.92 (USD) 0
19.18 (EUR) / $23.27 (USD) 0
24.15 (EUR) / $29.29 (USD) 0
29.72 (EUR) / $36.05 (USD) 0
Ratios Ratio Average
PE Ratio 21.13
PB Ratio 1.45
PS Ratio 1.52
PCF Ratio 10.56
EV to EBITDA 13.68

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  NOMD:NYS for the last 7 years was  1.30

We ran the Adjusted Book Value for  NOMD:NYS and generated a book value of  12.35 (EUR) / $14.98 (USD)
By multiplying these we get an adjusted valuation of  13.23 (EUR) / $16.05 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for NOMD:NYS. The 2 analysts have a concensus valuation for NOMD:NYS for 2021 of 25.38 (EUR) / $30.79 (USD).

NOMD:NYS Nomad Foods

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 0 0 5.0000 Buy 2021-5-6

Current Price: 28.74 USD

Analyst Consensus
EUR Millions 2021 2022 2023
Mean EPS 1.83 1.93 2.00
# EPS Analysts 2 2 1
Mean Revenue 3,133.20 3,195.80 3,235.50
# Revenue Analysts 2 2 1
Mean Target Price 30.79
Mean Cash Flow 2.16 2.39 2.48
Mean EBITDA 583.10 606.10 626.80
Mean Net Income 329.10 346.80 362.50
Mean Debt Outstanding 1,386.70 1,055.70 785.10
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 63.60 64.90 64.70

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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