Universal Corporation operates as a leaf tobacco merchant and processor worldwide. It engages in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. The company was founded in 1888 and is based in Richmond, Virginia.
UVV Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Universal Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Universal Corp ranked in the 26th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Universal Corp ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 8.37 -- which is good for besting 63.8% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
Universal Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 19.55% of tickers in our DCF set.
Universal Corp's effective tax rate, as measured by taxes paid relative to net income, is at 24 -- greater than 89% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as UVV, try INGR, MKC, CORE, TWNK, and UTI.