B&G Foods Inc (BGS) Intrinsic Value Analysis

Executive Summary

As of June 13, 2025, B&G Foods Inc's estimated intrinsic value ranges from $5.07 to $19.30 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$17.92	+295.5%
Discounted Cash Flow (5Y)	$5.07	+12.0%
Earnings Power Value	$19.30	+326.1%

Is B&G Foods Inc (BGS) undervalued or overvalued?

With the current market price at $4.53, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate B&G Foods Inc's intrinsic value, including:

1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
2. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component	Low	High
Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.99	2.16
Cost of equity	8.4%	17.0%
Cost of debt	5.6%	12.4%
Tax rate	24.9%	26.3%
Debt/Equity ratio	5.82	5.82
After-tax WACC	4.8%	10.3%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

• Forecast Period: 5-year DCF and 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 7.6% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $1,932 (FY12-2024) to $2,266 (FY12-2034)
• Net profit margin expansion from -13% to 3%
• Capital expenditures maintained at approximately 1% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$5	$2,350M	85.9%
10-Year Growth	$18	$3,374M	72.2%
5-Year EBITDA	$(1,234)	$1,134M	70.7%
10-Year EBITDA	$1	$2,056M	54.4%

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component	Value
Normalized Earnings	$229M
Discount Rate (WACC)	10.3% - 4.8%
Enterprise Value	$2,232M - $4,738M
Net Debt	$1,945M
Equity Value	$287M - $2,793M
Outstanding Shares	80M
Fair Value	$4 - $35
Selected Fair Value	$19.30

Key Financial Metrics

Metric	Value
Market Capitalization	$361M
Enterprise Value	$2306M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	8.25
Current Dividend Yield	1728.46%
Dividend Growth Rate (5Y)	-16.24%
Debt-to-Equity Ratio	5.82

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method	Weight	Weighted Value
Discounted Cash Flow (10Y)	46%	$5.37
Discounted Cash Flow (5Y)	38%	$1.27
Earnings Power Value	15%	$1.93
Weighted Average	100%	$13.19

Investment Conclusion

Based on our comprehensive valuation analysis, B&G Foods Inc's weighted average intrinsic value is $13.19, which is approximately 191.2% above the current market price of $4.53.

Key investment considerations:

• Strong projected earnings growth (-13% to 3% margin)
• Consistent cash flow generation

Given these factors, we believe B&G Foods Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.