Scribd
Upload
219 views5 pages

CLW Analysis 6-1-21

Clearwater Paper produces paperboard, tissue products, lumber, and pulp from two primary divisions. The majority of Clearwater's sales come from paperboard and tissue products manufactured in the US for packaging and consumer use. The company has a market capitalization of $468.89 million and obtains the vast majority of its revenue from two major customers in the US market.

Uploaded by

Hunter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
219 views5 pages

CLW Analysis 6-1-21

Clearwater Paper produces paperboard, tissue products, lumber, and pulp from two primary divisions. The majority of Clearwater's sales come from paperboard and tissue products manufactured in the US for packaging and consumer use. The company has a market capitalization of $468.89 million and obtains the vast majority of its revenue from two major customers in the US market.

Uploaded by

Hunter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

Clearwater Paper Analysis

Clearwater produces solid bleach sulfate paperboard, consumer tissue products, lumber, and
hardwood and softwood pulp. The business is divided into two primary divisions: Its Pulp and
Paperboard segment manufactures paperboard (used to make packaging for foods, liquids,
pharmaceuticals, and toiletries) and pulp (consumed internally to make paperboard and tissues). A
Consumer Products arm produces a private label tissue, largely for grocery chains. The vast majority
of Clearwater sales are made in the US.

* Taken from Bloomberg Terminal with minor grammatical changes:

Only 2 customers, 20 suppliers:


Moody’s last updated mid-2019, Standard & Poor’s, mid-2020 (outlook) other ratings go back as
far as 2010:
Value in $M's Weight %
Market Cap $ 468.89 37%
Short Term Debt $ 16.90 1%
Long Term Debt $ 770.70 61%
Pref. Equit 0%
Total $ 1,256.49

Cost of Equity 9%
RFR 2%
Beta 0.93
Equity Risk Premium 8%
Expected Market Return 10%

Cost of Debt 4%
RFR 2%
Default Spread 3%
1-Tax Rate 79%

WACC 6%

Multiple 10
EBITDA $ 223.20
Enterprise Value $ 2,246.59
Cash $ 35.90
Total Debt $ 787.60
Equity Value $ 1,494,891,386.34
Estimated Price $ 90.96
$M's
Historical Current Year Forecasts
2016 2017 2018 2019 2020 2021 2022 2023
Revenues $ 1,734.76 $ 1,730.41 $ 1,724.22 $ 1,761.50 $ 1,868.60 $ 1,746.33 $ 1,898.00 1928.92216
Revenue Growth Rate 0% 0% 2% 6% -7% 9% 2%

EBIT $ 118.97 $ 87.35 $ 82.05 $ 51.70 $ 172.10 $ 61.00 $ 112.00 $ 106.59


EBIT Margin 7% FALSE 5% 3% 9% 3% 6% 6%

EBIT*(1-Tax) $ 96.36 $ 70.75 $ 66.46 $ 41.88 $ 139.40 $ 48.19 $ 88.48 $ 84.21


Tax Rate: 19% 19% 19% 19% 19% 21% 21% 21%

D&A $ 91.09 $ 104.99 $ 101.95 $ 130.60 $ 126.90 $ 101.67 $ 96.00 $ 116.61


D&A/Revenue 5% 6% 6% 7% 7% 6% 5% 6%

CAPEX $ (155.35) $ (199.75) $ (295.71) $ (140.10) $ (39.60) $ (166.67) $ (183.39) $ (179.12)


CAPEX/Revenue -9% -12% -17% -8% -2% -10% -10% -9%

Current Assets $ 446.50 $ 452.79 $ 443.95 $ 465.80 $ 474.90 $ 452.34 $ 492.24 $ 499.37
CA/Revenue 26% 26% 26% 26% 25% 26% 26% 26%

Current Liabilities $ 366.52 $ 419.25 $ 449.30 $ 280.40 $ 244.80 $ 253.38 $ 275.39 $ 279.88
CL/Revenue 21% 24% 26% 16% 13% 15% 15% 15%

NWC $ 79.98 $ 33.54 $ (5.35) $ 185.40 $ 230.10 $ 198.95 $ 216.85 $ 219.49


Change in NWC $ (46.44) $ (38.89) $ 190.75 $ 44.70 $ (31.15) $ 17.90 $ 2.64
Unlevered Cash Flow $ 32.10 $ 22.43 $ (88.41) $ (158.37) $ 182.00 $ 14.33 $ (16.81) $ 19.06

WACC 6% 6% 6%

Discounted Cash Flow $ 13.55 $ (15.02) $ 16.10

Share Price EBITDA


Multiple $ 201.44 $ 212.04 $ 223.20 $ 234.36 $ 246.07
9.025 $ 65.77 $ 71.59 $ 77.72 $ 83.85 $ 90.28
9.5 $ 71.59 $ 77.72 $ 84.17 $ 90.62 $ 97.39
10 $ 77.72 $ 84.17 $ 90.96 $ 97.75 $ 104.88
10.5 $ 83.85 $ 90.62 $ 97.75 $ 104.88 $ 112.36
11.025 $ 90.28 $ 97.39 $ 104.88 $ 112.36 $ 120.22

Gain/Loss EBITDA
Multiple $ 201.44 $ 212.04 $ 223.20 $ 234.36 $ 246.07
9.025 131% 151% 172% 194% 216%
9.5 151% 172% 195% 218% 241%
10 172% 195% 219% 243% 268%
10.5 194% 218% 243% 268% 294%
11.025 216% 241% 268% 294% 321%

You might also like