INTRODUCTION
Forbes’ annual list of the World’s Most Valuable Brands—which looks at the top 100 companies from fiscal year 2019—shows that some of the biggest winners during the ongoing Covid-19 pandemic have been on top since the close of last year. Companies including Amazon, Netflix and PayPal all show substantial gains in brand value since last year’s list, falling in line with trends related to e-commerce, streaming and digital payments. However, there are some newcomers. Brands like Nintendo, Burger King, Hennessy and AXA, for example, all made their way onto the ranking, while Philips, Hewlett Packard Enterprise, Nissan and Kellogg’s were knocked off. The question is: What will the 2020 list look like a year after the beginning of the pandemic? Read More
METHODOLOGY
After looking at a universe of 200 global brands with a notable presence in the U.S., our first step in valuing the brands was to determine revenue and earnings before interest and taxes for each one. We then averaged earnings before interest and taxes (EBIT) over the past three years and subtracted from earnings a charge of 8% of the brand’s capital employed, figuring a generic brand should be able to earn at least 8% on this capital. (Forbes also applied the corporate tax rate in the parent company’s home country to that net earnings figure.) Next, we allocated a percentage of those earnings to the brand based on the role brands play in each industry. To this net brand earnings number, we applied the average price-to-earnings multiple over the past three years to arrive at the final brand value. For privately held outfits we applied earnings multiples for comparable public companies.
BY THE
NUMBERS
BIGGEST VALUE % GAIN FROM 2019 to 2020 List
BIGGEST VALUE % LOSS FROM 2019 to 2020 List
The brands that gained and lost the most value in the past year:
BY MARTY SWANT