SpartanNash Company operates as a grocery distributor and retailer primarily in the United States. The company operates in three segments: Military, Food Distribution, and Retail. The company was founded in 1917 and is based in Grand Rapids, Michigan.
SPTN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for SpartanNash Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that SpartanNash Co ranked in the 80th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of SpartanNash Co, consider:
The company's balance sheet shows it gets 46% of its capital from equity, and 54% of its capital from debt. Its equity weight surpasses that of just 18.63% of free cash flow generating stocks in the Consumer Defensive sector.
SpartanNash Co's weighted average cost of capital (WACC) is 10%; for context, that number is higher than 74.89% of tickers in our DCF set.
SpartanNash Co's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
BTI, ALCO, BRFS, SANW, and HFFG can be thought of as valuation peers to SPTN, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
Shares of SpartanNash (NASDAQ: SPTN) rose this morning, with gains of as much as 11% before closing roughly flat for the day, after the company reported first-quarter earnings. The grocery wholesaler and retailer easily beat expectations as grocery demand remains strong amid the COVID-19 pandemic. SpartanNash estimates that $0.38 of adjusted earnings per share was driven by increased consumer demand related to the crisis as people stocked up on food and other consumer staples.