Stock pitch of Herc Rentals, traded on the New York Stock Exchange (NYSE). Target price created through a Discounted Cash Flow (DCF) analysis with the EBITDA multiple approach.
Sources: Company Website, Company Filings, Thomson One, RBC Capital Markets, KeyBank Capital Markets, GAMCO Investors, Yahoo! Finance, Independent, PwC, Oxford Economics,
Any ambitious enterprise that is going to achieve and sustain profitability and profit
growth, no question, would have to expand business abroad, to gain extra market and
sales, and profit in result, by employing benefit of location and large scale economies,
experience and learning sharing effects. However, as it has been self-proven to
countless firms, foreign markets are never a flat plain field without trap, instead
absolutely represent an adventure. The adventurers would face immense issues like
cross-border management coordination, unions, local consumer taste and preference
over products and services, local government regulations, majority among which stem
from the environmental divergence in different markets, legally, economically, or
culturally. Automotive industry is born for global market, due to the intrinsic pressure
for cost reduction, as the initial high cost per unit retards the market expansion to great
degree. Meanwhile, most of time, cars are consumer products whose markets are filled
with local taste and preference, and local government regulations because the industry
is never too little for local government to neglect the influence of automotive industry
over whole local economy. This paper will go through the basic thinking of
international business strategy concept, and focus on the current world largest
automaker Toyota’s strategy, in the context of the past and ongoing environments.
Any ambitious enterprise that is going to achieve and sustain profitability and profit
growth, no question, would have to expand business abroad, to gain extra market and
sales, and profit in result, by employing benefit of location and large scale economies,
experience and learning sharing effects. However, as it has been self-proven to
countless firms, foreign markets are never a flat plain field without trap, instead
absolutely represent an adventure. The adventurers would face immense issues like
cross-border management coordination, unions, local consumer taste and preference
over products and services, local government regulations, majority among which stem
from the environmental divergence in different markets, legally, economically, or
culturally. Automotive industry is born for global market, due to the intrinsic pressure
for cost reduction, as the initial high cost per unit retards the market expansion to great
degree. Meanwhile, most of time, cars are consumer products whose markets are filled
with local taste and preference, and local government regulations because the industry
is never too little for local government to neglect the influence of automotive industry
over whole local economy. This paper will go through the basic thinking of
international business strategy concept, and focus on the current world largest
automaker Toyota’s strategy, in the context of the past and ongoing environments.
William Blair Investment Banking Case Competition Jake White
Performed comprehensive strategic analysis for a fictitious educational services provider to identify and evaluate potential exit opportunities that would position the company for strong future expansion. Constructed public comparables, precedent transactions, discounted cash flow and leveraged buyout analyses to form a valuation range.
For my Capstone at Flagler College, I conducted primary and secondary research to establish a marketing and public relations campaign to deter consumers from pirating Netflix Original content.
A 72-hour M&A case competition on whether Whole Foods Market should be taken private by The Blackstone Group, or seek out strategic partners in order to alleviate sliding margins and increased competition in the US organic and natural foods market.
Our solution, a strategic merger with Publix Super Markets and a public health-focused growth strategy was well-received by the judges from Guggenheim Partners.
The Walt Disney: The Entertainment KingAnuj Poddar
This case is comprised of the company's history, from 1923 to 2001. The Walt years are described, as is the company's decline after his death and its resurgence under Eisner, some topics are devoted to Eisner's strategic challenges in 2001: managing synergy, managing the brand, and managing creativity. The case was written by Michael G. Rukstad and David Collis
The case was uploaded with a Walt Disney font, but Slideshare was not able to detect that
Burton Snowboards Digital Marketing Presentation (PDF)David Brooks
A digital marketing proposal for Burton Snowboards. The company's uniquely definitive target market of young consumers requires active participation among the rider community online.
Cleveland Research Company Stock Pitch Competition Finalist PresentationNick Meyerson
Finished in the top 5 teams, presented this slideshow to a panel of equity research analysts and associates, and fielded questions about Mobileye's capital structure, its share price's sensitivity to excitement in the media, and projections including a DCF analysis, comparables analysis, and multiple sensitivity analyses.
Was one of five teams to present in front of a panel of equity research analysts and associates. Pitched Mobileye (MBLY) stock as a buy with a 12 month price target of $70.00 with a 67% upside from its current share price. As of 9/9/2016, MBLY is up 31% since our pitch.
How can SB-design square, Index Furniture and Modernform survive after Ikea, a global leader, enters the market competition?
Currently, four key players dominate the furniture market: Index, SB Design, Modernform and Ikea. Ikea is a Swedish enterprise. It entered the market at the end of 2011. It made the market competition fiercer by bringing superior design and technology. Ikea has come to change the competitive landscape of the Thai furniture market by making Thai furniture companies not only compete on price but also on design.
William Blair Investment Banking Case Competition Jake White
Performed comprehensive strategic analysis for a fictitious educational services provider to identify and evaluate potential exit opportunities that would position the company for strong future expansion. Constructed public comparables, precedent transactions, discounted cash flow and leveraged buyout analyses to form a valuation range.
For my Capstone at Flagler College, I conducted primary and secondary research to establish a marketing and public relations campaign to deter consumers from pirating Netflix Original content.
A 72-hour M&A case competition on whether Whole Foods Market should be taken private by The Blackstone Group, or seek out strategic partners in order to alleviate sliding margins and increased competition in the US organic and natural foods market.
Our solution, a strategic merger with Publix Super Markets and a public health-focused growth strategy was well-received by the judges from Guggenheim Partners.
The Walt Disney: The Entertainment KingAnuj Poddar
This case is comprised of the company's history, from 1923 to 2001. The Walt years are described, as is the company's decline after his death and its resurgence under Eisner, some topics are devoted to Eisner's strategic challenges in 2001: managing synergy, managing the brand, and managing creativity. The case was written by Michael G. Rukstad and David Collis
The case was uploaded with a Walt Disney font, but Slideshare was not able to detect that
Burton Snowboards Digital Marketing Presentation (PDF)David Brooks
A digital marketing proposal for Burton Snowboards. The company's uniquely definitive target market of young consumers requires active participation among the rider community online.
Cleveland Research Company Stock Pitch Competition Finalist PresentationNick Meyerson
Finished in the top 5 teams, presented this slideshow to a panel of equity research analysts and associates, and fielded questions about Mobileye's capital structure, its share price's sensitivity to excitement in the media, and projections including a DCF analysis, comparables analysis, and multiple sensitivity analyses.
Was one of five teams to present in front of a panel of equity research analysts and associates. Pitched Mobileye (MBLY) stock as a buy with a 12 month price target of $70.00 with a 67% upside from its current share price. As of 9/9/2016, MBLY is up 31% since our pitch.
How can SB-design square, Index Furniture and Modernform survive after Ikea, a global leader, enters the market competition?
Currently, four key players dominate the furniture market: Index, SB Design, Modernform and Ikea. Ikea is a Swedish enterprise. It entered the market at the end of 2011. It made the market competition fiercer by bringing superior design and technology. Ikea has come to change the competitive landscape of the Thai furniture market by making Thai furniture companies not only compete on price but also on design.
This Facebook pitch deck illustrates the vast potential for investors, institutional and retail alike, to capitalize on the upside of the social media giant. We dissect the impact of Facebook's latest acquisitions, current and future growth rates, the NPV of the acquisitions and what it all means for Facebook shareholders going forward.
Cleveland Research Company 2016 Stock Pitch Competition- Tempur Selay Finalist Alexander Liscum
One of 5 finalists chosen out of 25 competitive teams to present to equity research professionals in the 2016 CRC Stock Pitch Competition at Miami University.
Driving growth and differential performance among Class I railroadsDeloitte United States
Building a precision-scheduled railroad generated substantial benefit for Class I railroads and their shareholders when compared to their prior performance. However, with nearly all railroads pursuing the same strategy, we see differential performance among the Class I railroads driven primarily by changes in industrial production rather than strategic choices by management and Boards of Directors. Breaking away from the narrow range of industry peer performance will likely require more deliberate choices about the scope of operations and services that offer good prospects for returns on capital. Railroad executives should shift attention from operations to the configuration of commercial functions to help realize distinct competitive advantages and improved shareholder returns.
Acquisition analysis of Terex corporation by ZoomlionRajat Ranjan
• Evaluated the proposed acquisition of Terex Corporation by Zoomlion Heavy Industries as Buy-side adviser and won Runner’s up prize in the Valuation contest.
• Performed equity valuation and built fully integrated cash flow models for 5-year projections utilizing (i) Comparable Company Analysis (ii) DCF (iii) Precedent transactional analysis.
• Prepared a full report and presented the analysis with the recommended bid price range for the acquisition, with emphasis on the deal rationale, synergies, cost savings, qualitative factors.
JLL Detroit Industrial Insight & Statistics - Q2 2016Aaron Moore
The automotive industry is not going anywhere. Although it is in the midst of a disruption, the advancements are a win-win for all. The Big Three are generally experiencing steady growth trends in line with improving consumer sentiment and economic gains.
Company Valuation PowerPoint Presentation Slides SlideTeam
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MBA 620 TransGlobal Airlines Information Location, SiAbramMartino96
MBA 620 TransGlobal Airlines Information
Location, Size, and Age of the Firm
• Name: TransGlobal Airlines
• Home Country: USA
• HQ Location: Miami, FL
• Size: 40,000 employees
• Age: began operations in 1951
Customer Segment and Target Market
• Class: global airliner with dominant U.S. presence
• Market: global
• Destinations: 242 destinations serving 52 countries across six continents
• Market segment: first class, luxury, business class, and economy
• Global market share: 18% (ranked 2nd, American is number one at 18.6%)
• U.S. market share: 18.3% (ranked 2nd, Southwest first at 19.1%)
• Retention: 80% return customers
• New customer growth: 27% annually (prior to COVID)
• Passenger kilometers: 278 billion (American is number one at 287 billion)
Major Competitors
All international and domestic U.S. airlines
Company Leadership
Publicly held with a board, president, VP admin, CEO, CFO, COO, VP sales, division VPs, subsidiaries
Current Financials
• Annual gross revenues: $20.683 billion
• Annual net income: $2.099 billion
• Adjusted earnings per share of $3.22, a 28% increase year-over-year
• Delivery of 88 new aircraft during the year
• Number of aircraft in fleet, end of period: 1,062
• Average age of aircraft: 13 years
• Domestic revenue grew 7.7% in the last quarter on 1.6% higher passenger unit revenue (PRASM)
and 6% higher capacity. Domestic premium product revenue grew 11% and corporate revenue
grew 6%, driven by strength in business and leisure demand through the holiday period.
Revenue and margin improved in all domestic hubs, with revenue up 10% in coastal hubs and
6% in core hubs.
• Atlantic revenue grew 0.8% in the last quarter on 2.4% higher capacity and a 1.6% decline in
PRASM, driven almost entirely by foreign exchange rates.
• Latin revenue grew 6.7% on a 6.3% increase in unit revenue and 0.4% higher capacity. This
revenue improvement was driven by continued double-digit unit revenue growth in Brazil and
Mexico.
• Pacific revenue was down 0.5% vs. the prior year on a 4.4% decline in unit revenue primarily due
to continued softness in China. This was a 3.2 point improvement vs. the September quarter on
improved trends in Japan.
Strategic Plans and Goals
The board of directors has recently approved a comprehensive plan identified as TransGlobal 2030. The
plan is the result of eight months of data collection, customer focus groups, leadership retreats, and
employee input.
The TransGlobal 2030 vision is to lead the industry in three critically important areas: safety, excitement,
and stewardship (SES). This SES vision has been translated into a collection of guiding principles and goal
statements:
• SES Principles
o We will always treat our customers with respect.
o We will value our employees and business partners.
o We will innovate to provide our customers with the most forward-thinking and exciting
travel e ...
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Robert Koven Leonis Partners 1st Quarter 2018 IT Services AnalysisRobert Koven
LEONIS CREDENTIALS & SERVICES
▪ Leonis solely focuses on providing M&A and Growth Capital advisory services to both high-growth and well- established technology and technology services companies
▪ Leonis core areas of focus include:
▪ Sell-side M&A: represent companies looking to be acquired by a strategic or go through a fulsome liquidity event with a financial sponsor
▪ Capital Raises:
• Majority Equity Raises: Recapitalizations from private equity & growth equity firms who understand the sector and will be able to partner with management to inject capital and provide expertise to maximize the company’s growth
• Minority Equity Raises: Equity investments from private equity and strategic partners who bring capital and market expertise to bear
▪ Retained Advisory Services: strategic guidance to assist management in maximizing firm value ahead of a potential liquidity event, as well as manage inbound offers and solicitations
FIRM OVERVIEW
▪ Bankers with over 50 years of combined experience in bulge bracket Wall Street firms and Middle Market
▪ Team has executed over 105 M&A, restructuring and capital raising deals with cumulative transaction values over $170 billion
▪ Team executed eight deals in the last twelve months with an 85% close rate
▪ Deep knowledge of strategic and financial buyers with a proprietary database of more than 4,200 private equity investors and 1,800 strategic acquirers
▪ Team with experience advising, operating and investing in businesses within the firm’s core areas provides an unbiased view of how “the other side” will look at a deal
Analysis of recent transactions in Automobile parts & equipments Industry detailing on Transaction Multiples (Revenue & EBITDA), Multiples Chart, Active Buyers & Transaction Data. A goldmine of resource for Entrepreneurs.
Similar to Herc Rentals (NYSE:HRI) Stock Pitch (20)
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
2. § Herc Rentals (HRI) is a diversified equipment rental company with a balancedbusiness profile
§ Operates out of 280 company-ownedbranches around theworld to provide customers with
equipment, services and solutions necessary to achieve optimal performance
§ Serves a broad range of customer end user markets, including construction, industrial,
government, infrastructure, remediation,emergency response, entertainmentand events,
facilities and maintenance
§ Separated from Hertz’s rental car business on June 30, 2016, enabling thefirm to have financial
and operational flexibility to pursue strategies specific to theequipment rental business
§ Own approximately $3.5Bnin fleet and have total revenues of approximately $1.6Bn, making it
the third largest equipment-rental firm by revenue
2
Business Description
North American Equipment Rental
Market
Sources: Company Website, RBC Capital Markets, KeyBank Capital Markets
Company Overview
Management Team
• Experienced leadership team, with the
CEO, COO, & CIO have more than 30
years of equipment industry experience
• The regional vice-presidents have an
average of 24 years of industry experience
“The opportunity in Herc lies in the company's growth.Down the road as it improves its margins […] the stock will rise to $78
per share in the next three years.” – Mario Gabelli
3. § Equipment rentals is a $45Bn
business growing at 4% to 5%
§ Highly fragmented, with threemajor
players benefitting from the
increase in infrastructure spending
§ Decreasing production in the
upstream oil and gas markets
3
Investment Thesis I
Sources: Company Website, RBC Capital Markets, KeyBank Capital Markets, GAMCO Investors, Yahoo! Finance, Independent
Investment Thesis
Investment Thesis II
Investment Thesis III
§ Strong asset base, including a $3.5Bn fleet of
machines, and 280 company-owned branches
around with 270 in the United States and
Canada
§ Expanding products and services, by adding
smaller products such as floor scrubbers
§ Focused on expanding ProSolutions and
ProContractor tools in North America
§ The United States currently has poor infrastructure, with 40% of
bridges being rated as D- by the ASCE
§ American infrastructure spending projected to increase $1Tn
Growing Equipment Rental Business Projected Increase in Infrastructure Spending
Strong Asset Base and Broad Footprint in North America
4. § Global infrastructure spending to reach
$9Tn by 2025, with the United States
projecting $1Tn in infrastructure spending
by 2025
§ Currently a$45Bn business growing at 4-
5%
4
Catalysts
Sources: Company Website, BMI Research, Yahoo! Finance, PwC, Oxford Economics
Catalysts and Risks
Risks
§ Only 10 locations
outside North America
§ Canada and the United
States currently
represent 82% of total
revenue
§ Making strategic changes to reduce fleet and
control costs in upstreamoil & gas markets
§ Made strategic changes to deemphasize low
margin new equipment sales
§ Implemented new rental training programs to
support the ProSolutions and ProContractor gear
Increasing Global Infrastructure Spending
Strategic Changes to Equipment Lines
Highly Fragmented Industry
§ Highly fragmented industry,with top 3
major players benefitting the most
§ Strong asset base of machines that could
handle an increased market demand
Non-Residential Construction
§ Non-residential
construction
slowed in 2016,
but still remains
positive
§ Significant portionof
the fleet that is
unavailable for rent
§ Due to oversupply of
certain used equipment
Worldwide Markets
Fleet Availability
5. 5
Valuation Range
Sources: Company Filings
See Appendix for Valuation Model Breakdowns
Valuation & Conclusion
Price Target Summary Justification
28.3
20.9
28.97
59.6
54.1
38.20
10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0
DCF Value at 4.0x-6.0x Exit EBITDA Range
DCF Value at 2.0%-4.0% Perpetuity Range
52 Week Market High/Low
DCF / LBO Football Field
Target Price: $52
Target Price $52.00
Current Market Price $39.86
Implied 1-Year Return 30.5%
§ The Discounted Cash Flow Value at 2.0% to 4.0%
perpetuity range heavily discounts the growth of Herc
due to new macro trends in fiscal spending
Market Cap $1.13Bn Enterprise Value $3,151Bn
Price/Earnings 15.73x
Herc's experienced executive team,combined with new macro trends in fiscal spending on infrastructure,provides a very
unique & attractive entry-pointfor investors.
6. 6
Public Company Comparables
Sources: Company Filings, Thomson One
Appendix I: Comparable Companies
Car Rental EV / EBITDA EV / Sales Price / Earnings
(US$ millions, except per share data) Enterprise Value
Equity
Value
Price LTM FY1 FY2 LTM FY1 FY2 LTM FY1 FY2
Peer Group Name
Avis Budget $16,312.01 $3,331.01 $37.90 5.6 x 19.3 x 18.5 x 1.9 x 1.9 x 1.8 x 19.0 x 12.8 x 11.1 x
Hertz Global $16,143.05 $2,362.05 $28.47 4.4 x 23.1 x 18.3 x 1.7 x 1.8 x 1.8 x NEG 41.7 x 9.5 x
Sixt $4,688.35 $2,511.44 $58.99 6.0 x 5.8 x 5.3 x 1.8 x 1.7 x 1.6 x 21.8 x 19.1 x 16.7 x
Europcar Groupe $3,839.57 $1,351.76 $9.43 8.5 x 13.7 x 13.2 x 1.6 x 1.6 x 1.6 x 11.9 x 10.3 x 9.4 x
MEAN $10,245.75 $2,389.06 – 6.1 x 15.5 x 13.8 x 1.7 x 1.8 x 1.7 x 17.6 x 21.0 x 11.7 x
HERC Holdings $3,151 $1,077 $38.04 5.6x 5.9x 5.5x 2.0x 2.0x 1.9x 15.7x 496.2x 43.1x
Equipment Rental Public Comps EV / EBITDA EV / Sales Price / Earnings
(US$ millions, except per share data) Enterprise Value
Equity
Value
Price LTM FY1 FY2 LTM FY1 FY2 LTM FY1 FY2
Peer Group Name
United Rentals Inc $15,114.09 $7,681.27 $89.50 5.6 x 5.7 x 5.6 x 2.6 x 2.7 x 2.7 x 13.7 x 10.8 x 10.6 x
H&E Equipment Services $1,333.24 $613.02 $15.18 4.7 x 4.4 x 4.4 x 1.4 x 1.4 x 1.4 x 13.5 x 15.7 x 15.4 x
Ritchie Bros. Auctioneers Incorporated $3,917.27 $4,086.18 38.30 20.3 x 18.7 x 16.8 x 7.0 x 7.0 x 6.6 x 37.6 x 32.5 x 29.1 x
Allison Transmission Holdings, INC. $7,142.52 $5,138.52 31.07 12.9 x 11.5 x 11.4 x 3.7 x 4.0 x 3.9 x 31.5 x 26.8 x 22.7 x
Navistar International Corporation $6,458.29 $2,195.29 26.89 14.8 x 11.7 x 10.9 x 0.8 x 0.8 x 0.8 x NEG NEG 44.0 x
MEAN $6,793.08 $3,942.86 – 11.7 x 10.4 x 9.8 x 3.1 x 3.2 x 3.1 x 24.0 x 21.4 x 24.3 x
HERC Holdings $3,151 $1,077 $38.04 5.6x 5.9x 5.5x 2.0x 2.0x 1.9x 15.7x 496.2x 43.1x
7. 7
Projected Cash Flow and Share Price
Sources: Company Filings, Thomson One
Appendix II: Discounted Cash Flow Analysis
Free cash flow buildup
Fiscal year 2015A 2016E 2017E 2018E 2019E 2020E CAGR 2017-2021 Assumptions
Revenue 1500.0 1575.0 1693.1 1828.6 1965.7 2083.7 5.8%
Rental Truck Industry to grow at 6.8%
CAGR till end of 2020
Annual Growth - 5.0% 7.5% 8.0% 7.5% 6.0%
EBITDA 579.0 625.0 745.0 822.9 884.6 833.5 5.9%
Estimate 45% EBITDA margin, competitor
average historical
EBIT 127.8 245.0 368.8 450.4 508.4 449.8
Less Taxes 35.0% (45.6) (85.8) (129.1) (157.6) (177.9) (157.4) Currently has high Deferred Taxes
EBIAT (NOPAT) 82.2 159.3 239.7 292.8 330.5 292.4
Plus: Depreciation and amortization 383.3 380.0 376.2 372.4 376.2 383.7
Plus: Deferred Taxes 22.3 36.7 36.7 36.7 36.7 36.7 Net loss carryforwards straight line
Plus: Stock Based Compensation 3.0 3.0 3.0 3.0 3.0 3.0
Less: Increase in net working capital $(29.3) $(30.0) $(35.0) $(35.0) $(30.0) $(25.0)
Unlevered CFO 461.5 549.0 620.6 670.0 716.4 690.8
Less: Capital expenditures $(537.0) $(513.0) $(518.1) $(523.3) $(518.1) $(507.7) -0.2% Capex Historically Consistent
Less: Purchases of intangible assets - - - - - -
Unlevered FCF -75.5 36.0 102.5 146.6 198.3 183.1 38.4%
PV of FCFs 531.62
Exit EBITDA multiple approach
Terminal year EBITDA 833
Terminal value EBITDA multiple 6.0x
Terminal value 5,001
Present value of terminal value 4,150.0
Present value of stage 1 cash flows 531.6
Enterprise value 4,681.6
Implied TV perpetual growth rate 4.1%
Fair value per share
Enterprise value 4,682
Less: Net debt (2,058)
Equity value 2,623.6
Diluted shares 44.500
Equity value per share $58.96
Perpetuity approach
Normalized FCFt+1
183.07
Long term growth rate (g) 3.0%
Terminal value 3,974.2
Present value of terminal value 2,841.0
Present value of stage 1 cash flows 531.6
Enterprise value 3,372.7
Implied TV exit EBITDA multiple 4.8x
Fair value per share
Enterprise value 3,373
Less: Net debt (2,058)
Equity value 1,315
Diluted shares 44.500
Equity value per share $29.54
WACC: Long Term Growth Rate (g):
$29.54 2.0% 2.5% 3.0% 3.5% 4.0%
10.5% (3.66) (1.53) 0.89 3.65 6.84
9.5% 2.33 5.18 8.47 12.31 16.85
8.5% 10.17 14.14 18.82 24.44 31.32
7.5% 20.88 26.69 33.78 42.66 54.06
6.5% 36.36 45.52 57.31 73.02 95.02
5.5% 60.70 76.94 99.68 133.79 190.63
WACC: Exit EBITDA Multiple
$58.96 4.0x 4.5x 5.0x 5.5x 6.0x
10.5% 23.21 30.50 37.80 45.10 52.39
9.5% 24.85 32.31 39.78 47.24 54.71
8.5% 26.55 34.19 41.82 49.46 57.10
7.5% 28.31 36.12 43.94 51.75 59.57
6.5% 30.13 38.13 46.13 54.13 62.13
5.5% 32.01 40.20 48.39 56.58 64.77