Intrinsic value of Duke Energy - DUK

Previous Close

$77.22

  Intrinsic Value

$61.45

stock screener

  Rating & Target

sell

-20%

Previous close

$77.22

 
Intrinsic value

$61.45

 
Up/down potential

-20%

 
Rating

sell

We calculate the intrinsic value of DUK stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  1.66
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  22,743
  23,198
  23,731
  24,341
  25,026
  25,785
  26,617
  27,524
  28,505
  29,562
  30,697
  31,910
  33,205
  34,584
  36,050
  37,605
  39,253
  40,997
  42,842
  44,791
  46,849
  49,021
  51,311
  53,725
  56,268
  58,947
  61,768
  64,736
  67,860
  71,147
  74,603
Variable operating expenses, $m
 
  6,573
  6,679
  6,801
  6,937
  7,089
  7,255
  7,436
  7,632
  7,843
  8,069
  6,369
  6,627
  6,903
  7,195
  7,506
  7,834
  8,183
  8,551
  8,940
  9,351
  9,784
  10,241
  10,723
  11,231
  11,765
  12,328
  12,921
  13,544
  14,200
  14,890
Fixed operating expenses, $m
 
  11,503
  11,790
  12,085
  12,387
  12,697
  13,014
  13,339
  13,673
  14,015
  14,365
  14,724
  15,092
  15,470
  15,856
  16,253
  16,659
  17,076
  17,502
  17,940
  18,389
  18,848
  19,319
  19,802
  20,298
  20,805
  21,325
  21,858
  22,405
  22,965
  23,539
Total operating expenses, $m
  17,429
  18,076
  18,469
  18,886
  19,324
  19,786
  20,269
  20,775
  21,305
  21,858
  22,434
  21,093
  21,719
  22,373
  23,051
  23,759
  24,493
  25,259
  26,053
  26,880
  27,740
  28,632
  29,560
  30,525
  31,529
  32,570
  33,653
  34,779
  35,949
  37,165
  38,429
Operating income, $m
  5,314
  5,123
  5,262
  5,456
  5,702
  5,999
  6,348
  6,748
  7,200
  7,705
  8,262
  10,817
  11,486
  12,212
  12,998
  13,847
  14,759
  15,739
  16,789
  17,911
  19,110
  20,389
  21,750
  23,200
  24,740
  26,377
  28,114
  29,957
  31,911
  33,982
  36,174
EBITDA, $m
  9,194
  8,707
  8,884
  9,121
  9,415
  9,766
  10,174
  10,638
  11,160
  11,739
  12,377
  13,075
  13,835
  14,659
  15,549
  16,508
  17,537
  18,640
  19,820
  21,081
  22,425
  23,857
  25,381
  27,001
  28,722
  30,548
  32,485
  34,538
  36,713
  39,016
  41,453
Interest expense (income), $m
  1,794
  1,945
  2,017
  2,100
  2,196
  2,303
  2,422
  2,552
  2,694
  2,847
  3,013
  3,190
  3,380
  3,583
  3,798
  4,028
  4,271
  4,529
  4,802
  5,090
  5,395
  5,717
  6,057
  6,415
  6,793
  7,191
  7,610
  8,051
  8,516
  9,004
  9,519
Earnings before tax, $m
  3,734
  3,177
  3,245
  3,355
  3,506
  3,696
  3,927
  4,196
  4,507
  4,857
  5,250
  7,627
  8,106
  8,629
  9,200
  9,819
  10,488
  11,210
  11,987
  12,821
  13,715
  14,671
  15,693
  16,784
  17,947
  19,186
  20,504
  21,906
  23,396
  24,977
  26,656
Tax expense, $m
  1,156
  858
  876
  906
  947
  998
  1,060
  1,133
  1,217
  1,311
  1,417
  2,059
  2,189
  2,330
  2,484
  2,651
  2,832
  3,027
  3,237
  3,462
  3,703
  3,961
  4,237
  4,532
  4,846
  5,180
  5,536
  5,915
  6,317
  6,744
  7,197
Net income, $m
  2,152
  2,320
  2,369
  2,449
  2,559
  2,698
  2,866
  3,063
  3,290
  3,546
  3,832
  5,568
  5,917
  6,299
  6,716
  7,168
  7,657
  8,184
  8,751
  9,359
  10,012
  10,710
  11,456
  12,253
  13,102
  14,006
  14,968
  15,991
  17,079
  18,233
  19,459

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  503
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  132,761
  134,871
  137,973
  141,519
  145,500
  149,911
  154,751
  160,022
  165,726
  171,873
  178,469
  185,525
  193,055
  201,072
  209,592
  218,633
  228,215
  238,357
  249,082
  260,415
  272,380
  285,005
  298,320
  312,355
  327,142
  342,716
  359,114
  376,374
  394,536
  413,643
  433,741
Adjusted assets (=assets-cash), $m
  132,258
  134,871
  137,973
  141,519
  145,500
  149,911
  154,751
  160,022
  165,726
  171,873
  178,469
  185,525
  193,055
  201,072
  209,592
  218,633
  228,215
  238,357
  249,082
  260,415
  272,380
  285,005
  298,320
  312,355
  327,142
  342,716
  359,114
  376,374
  394,536
  413,643
  433,741
Revenue / Adjusted assets
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
Average production assets, $m
  12,716
  12,968
  13,266
  13,607
  13,990
  14,414
  14,879
  15,386
  15,934
  16,525
  17,159
  17,838
  18,562
  19,333
  20,152
  21,021
  21,942
  22,918
  23,949
  25,038
  26,189
  27,403
  28,683
  30,032
  31,454
  32,951
  34,528
  36,188
  37,934
  39,771
  41,703
Working capital, $m
  -3,512
  812
  831
  852
  876
  902
  932
  963
  998
  1,035
  1,074
  1,117
  1,162
  1,210
  1,262
  1,316
  1,374
  1,435
  1,499
  1,568
  1,640
  1,716
  1,796
  1,880
  1,969
  2,063
  2,162
  2,266
  2,375
  2,490
  2,611
Total debt, $m
  50,382
  51,715
  53,856
  56,302
  59,049
  62,093
  65,432
  69,069
  73,005
  77,246
  81,797
  86,666
  91,862
  97,394
  103,273
  109,511
  116,122
  123,120
  130,521
  138,340
  146,596
  155,308
  164,495
  174,179
  184,382
  195,128
  206,443
  218,352
  230,884
  244,068
  257,935
Total liabilities, $m
  91,728
  93,061
  95,202
  97,648
  100,395
  103,439
  106,778
  110,415
  114,351
  118,592
  123,143
  128,012
  133,208
  138,740
  144,619
  150,857
  157,468
  164,466
  171,867
  179,686
  187,942
  196,654
  205,841
  215,525
  225,728
  236,474
  247,789
  259,698
  272,230
  285,414
  299,281
Total equity, $m
  41,033
  41,810
  42,772
  43,871
  45,105
  46,473
  47,973
  49,607
  51,375
  53,281
  55,325
  57,513
  59,847
  62,332
  64,974
  67,776
  70,747
  73,891
  77,215
  80,729
  84,438
  88,352
  92,479
  96,830
  101,414
  106,242
  111,325
  116,676
  122,306
  128,229
  134,460
Total liabilities and equity, $m
  132,761
  134,871
  137,974
  141,519
  145,500
  149,912
  154,751
  160,022
  165,726
  171,873
  178,468
  185,525
  193,055
  201,072
  209,593
  218,633
  228,215
  238,357
  249,082
  260,415
  272,380
  285,006
  298,320
  312,355
  327,142
  342,716
  359,114
  376,374
  394,536
  413,643
  433,741
Debt-to-equity ratio
  1.228
  1.240
  1.260
  1.280
  1.310
  1.340
  1.360
  1.390
  1.420
  1.450
  1.480
  1.510
  1.530
  1.560
  1.590
  1.620
  1.640
  1.670
  1.690
  1.710
  1.740
  1.760
  1.780
  1.800
  1.820
  1.840
  1.850
  1.870
  1.890
  1.900
  1.920
Adjusted equity ratio
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,152
  2,320
  2,369
  2,449
  2,559
  2,698
  2,866
  3,063
  3,290
  3,546
  3,832
  5,568
  5,917
  6,299
  6,716
  7,168
  7,657
  8,184
  8,751
  9,359
  10,012
  10,710
  11,456
  12,253
  13,102
  14,006
  14,968
  15,991
  17,079
  18,233
  19,459
Depreciation, amort., depletion, $m
  3,880
  3,584
  3,622
  3,665
  3,713
  3,767
  3,826
  3,890
  3,959
  4,034
  4,115
  2,258
  2,350
  2,447
  2,551
  2,661
  2,778
  2,901
  3,031
  3,169
  3,315
  3,469
  3,631
  3,802
  3,982
  4,171
  4,371
  4,581
  4,802
  5,034
  5,279
Funds from operations, $m
  7,358
  5,904
  5,991
  6,114
  6,273
  6,465
  6,692
  6,953
  7,249
  7,580
  7,947
  7,826
  8,267
  8,747
  9,267
  9,829
  10,434
  11,085
  11,782
  12,529
  13,327
  14,179
  15,087
  16,054
  17,083
  18,177
  19,339
  20,572
  21,881
  23,268
  24,738
Change in working capital, $m
  86
  16
  19
  21
  24
  27
  29
  32
  34
  37
  40
  42
  45
  48
  51
  54
  58
  61
  65
  68
  72
  76
  80
  84
  89
  94
  99
  104
  109
  115
  121
Cash from operations, $m
  7,272
  5,888
  5,972
  6,093
  6,249
  6,439
  6,663
  6,922
  7,215
  7,543
  7,907
  7,783
  8,221
  8,698
  9,216
  9,774
  10,376
  11,023
  11,718
  12,461
  13,255
  14,103
  15,007
  15,970
  16,994
  18,083
  19,240
  20,468
  21,771
  23,153
  24,617
Maintenance CAPEX, $m
  0
  -1,610
  -1,641
  -1,679
  -1,722
  -1,771
  -1,825
  -1,883
  -1,948
  -2,017
  -2,092
  -2,172
  -2,258
  -2,350
  -2,447
  -2,551
  -2,661
  -2,778
  -2,901
  -3,031
  -3,169
  -3,315
  -3,469
  -3,631
  -3,802
  -3,982
  -4,171
  -4,371
  -4,581
  -4,802
  -5,034
New CAPEX, $m
  -7,901
  -252
  -298
  -341
  -383
  -424
  -465
  -507
  -549
  -591
  -634
  -678
  -724
  -771
  -819
  -869
  -921
  -975
  -1,031
  -1,090
  -1,150
  -1,214
  -1,280
  -1,349
  -1,422
  -1,497
  -1,577
  -1,659
  -1,746
  -1,837
  -1,932
Cash from investing activities, $m
  -11,533
  -1,862
  -1,939
  -2,020
  -2,105
  -2,195
  -2,290
  -2,390
  -2,497
  -2,608
  -2,726
  -2,850
  -2,982
  -3,121
  -3,266
  -3,420
  -3,582
  -3,753
  -3,932
  -4,121
  -4,319
  -4,529
  -4,749
  -4,980
  -5,224
  -5,479
  -5,748
  -6,030
  -6,327
  -6,639
  -6,966
Free cash flow, $m
  -4,261
  4,026
  4,032
  4,073
  4,143
  4,244
  4,373
  4,532
  4,719
  4,935
  5,181
  4,933
  5,239
  5,578
  5,949
  6,354
  6,794
  7,271
  7,785
  8,339
  8,935
  9,574
  10,258
  10,989
  11,771
  12,604
  13,492
  14,438
  15,444
  16,514
  17,650
Issuance/(repayment) of debt, $m
  5,868
  1,836
  2,140
  2,447
  2,747
  3,044
  3,340
  3,637
  3,936
  4,241
  4,551
  4,869
  5,195
  5,532
  5,879
  6,238
  6,611
  6,998
  7,400
  7,819
  8,256
  8,712
  9,187
  9,684
  10,203
  10,746
  11,314
  11,909
  12,532
  13,184
  13,867
Issuance/(repurchase) of shares, $m
  731
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  6,602
  1,836
  2,140
  2,447
  2,747
  3,044
  3,340
  3,637
  3,936
  4,241
  4,551
  4,869
  5,195
  5,532
  5,879
  6,238
  6,611
  6,998
  7,400
  7,819
  8,256
  8,712
  9,187
  9,684
  10,203
  10,746
  11,314
  11,909
  12,532
  13,184
  13,867
Total cash flow (excl. dividends), $m
  2,341
  5,863
  6,173
  6,519
  6,890
  7,287
  7,713
  8,168
  8,655
  9,176
  9,732
  9,802
  10,435
  11,110
  11,828
  12,593
  13,405
  14,269
  15,186
  16,159
  17,191
  18,285
  19,445
  20,673
  21,974
  23,350
  24,807
  26,347
  27,976
  29,698
  31,517
Retained Cash Flow (-), $m
  -1,306
  -777
  -962
  -1,099
  -1,234
  -1,367
  -1,500
  -1,634
  -1,769
  -1,905
  -2,045
  -2,188
  -2,334
  -2,485
  -2,641
  -2,803
  -2,970
  -3,144
  -3,325
  -3,513
  -3,709
  -3,914
  -4,128
  -4,351
  -4,584
  -4,828
  -5,083
  -5,350
  -5,630
  -5,923
  -6,230
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,085
  5,211
  5,420
  5,656
  5,920
  6,212
  6,534
  6,887
  7,271
  7,688
  7,614
  8,101
  8,624
  9,187
  9,790
  10,435
  11,125
  11,861
  12,646
  13,482
  14,372
  15,318
  16,323
  17,390
  18,522
  19,724
  20,997
  22,346
  23,775
  25,287
Discount rate, %
 
  8.90
  9.35
  9.81
  10.30
  10.82
  11.36
  11.93
  12.52
  13.15
  13.81
  14.50
  15.22
  15.98
  16.78
  17.62
  18.50
  19.43
  20.40
  21.42
  22.49
  23.61
  24.80
  26.03
  27.34
  28.70
  30.14
  31.65
  33.23
  34.89
  36.63
PV of cash for distribution, $m
 
  4,670
  4,359
  4,093
  3,821
  3,542
  3,258
  2,969
  2,680
  2,392
  2,109
  1,717
  1,479
  1,255
  1,047
  858
  690
  544
  420
  317
  233
  168
  117
  80
  53
  34
  21
  13
  7
  4
  2
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Duke Energy Corporation (Duke Energy) is an energy company. The Company operates through three segments: Electric Utilities and Infrastructure; Gas Utilities and Infrastructure, and Commercial Renewables. The Company operates in the United States through its direct and indirect subsidiaries. The Electric Utilities and Infrastructure segment provides retail electric service through the generation, transmission, distribution and sale of electricity to approximately 7.5 million customers within the Southeast and Midwest regions of the United States. The operations include electricity sold wholesale to municipalities, electric cooperative utilities and other load-serving entities. The Gas Utilities and Infrastructure segment serves residential, commercial, industrial and power generation natural gas customers. The Commercial Renewables primarily acquires, builds, develops and operates wind and solar renewable generation throughout the continental United States.

FINANCIAL RATIOS  of  Duke Energy (DUK)

Valuation Ratios
P/E Ratio 25.1
Price to Sales 2.4
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 7.4
Price to Free Cash Flow -85.9
Growth Rates
Sales Growth Rate 1.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.8%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 111.1%
Total Debt to Equity 122.8%
Interest Coverage 3
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 2.8%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 2.7%
Return On Equity 5.3%
Return On Equity - 3 Yr. Avg. 5.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 41.4%
EBITDA Margin - 3 Yr. Avg. 40.6%
Operating Margin 23.4%
Oper. Margin - 3 Yr. Avg. 22.5%
Pre-Tax Margin 16.4%
Pre-Tax Margin - 3 Yr. Avg. 16.9%
Net Profit Margin 9.5%
Net Profit Margin - 3 Yr. Avg. 10.1%
Effective Tax Rate 31%
Eff/ Tax Rate - 3 Yr. Avg. 31.9%
Payout Ratio 108.4%

DUK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DUK stock intrinsic value calculation we used $22743 million for the last fiscal year's total revenue generated by Duke Energy. The default revenue input number comes from 2016 income statement of Duke Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DUK stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.9%, whose default value for DUK is calculated based on our internal credit rating of Duke Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Duke Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DUK stock the variable cost ratio is equal to 28.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $11222 million in the base year in the intrinsic value calculation for DUK stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.9% for Duke Energy.

Corporate tax rate of 27% is the nominal tax rate for Duke Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DUK stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DUK are equal to 55.9%.

Life of production assets of 7.9 years is the average useful life of capital assets used in Duke Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DUK is equal to 3.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $41033 million for Duke Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 698.966 million for Duke Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Duke Energy at the current share price and the inputted number of shares is $54.0 billion.

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COMPANY NEWS

▶ N.C. regulators delay Duke Energy rate case   [02:10PM  American City Business Journals]
▶ Duke Energy rate hike affecting Charlotte likely to be delayed again   [Feb-22-18 06:00PM  American City Business Journals]
▶ Sierra Club opposes Duke Energy plan for natural gas mix at local coal plant   [Feb-21-18 05:50PM  American City Business Journals]
▶ Dow Tries to Scramble Back After Weak Morning   [Feb-20-18 01:19PM  Barrons.com]
▶ Duke Energy beats 4Q profit forecasts   [07:25AM  Associated Press]
▶ S.C. investment firm denies offering $10B to buy Santee Cooper   [Feb-16-18 03:20PM  American City Business Journals]
▶ 52-Week Company Lows   [10:53AM  GuruFocus.com]
▶ Duke Energy touts high productivity at its nuclear plants in the Carolinas   [Feb-14-18 04:50PM  American City Business Journals]
▶ Utilities Sell-Off Presents Buying Opportunities   [Feb-09-18 07:00AM  Morningstar]
▶ Charlottes Duke Energy defends proposed $589M hike in rates   [Feb-08-18 02:14PM  American City Business Journals]
▶ 52-Week Company Lows   [11:29AM  GuruFocus.com]
▶ 2 Top Conservative Dividend Stocks for Retirees   [Feb-07-18 08:21AM  Motley Fool]
▶ 9 Impressive Dividend Stocks to Buy and Hold   [Feb-02-18 02:31PM  InvestorPlace]
▶ Duke Energy: Tax-cut savings should go to customers but not all at once   [02:18PM  American City Business Journals]
▶ 52-Week Company Lows   [10:33AM  GuruFocus.com]
▶ 3 Dividend Stocks Perfect for Retirement   [09:00AM  Motley Fool]
▶ Duke Energy won't force neighbors to waive all legal claims   [Jan-29-18 01:52PM  Associated Press]
▶ Rate hike opponents attack Duke Energys proposed $13B grid-improvement plan   [Jan-26-18 09:42PM  American City Business Journals]
▶ Consolidated Edisons Healthy Dividend Profile   [05:35PM  Market Realist]
▶ N.C. customer advocate calls for $289M rate cut at Duke Energy   [03:09PM  American City Business Journals]
▶ How Does AEPs Valuation Compare to Its Peers?   [11:35AM  Market Realist]
▶ How these major Charlotte employers are tackling mobile-app trends   [09:00AM  American City Business Journals]
▶ Duke Energy proposes 'community solar' and other renewables programs for N.C.   [Jan-25-18 10:57AM  American City Business Journals]
▶ 52-Week Company Lows   [10:41AM  GuruFocus.com]
▶ Where Dominion Energy Stock Might Go from Here   [Jan-24-18 12:45PM  Market Realist]
▶ Duke Energy proposes solar rebate program for N.C. customers   [11:24AM  American City Business Journals]
▶ Dominion Energy Stock Compared to Its Peers   [11:15AM  Market Realist]
▶ Duke Energy Progress settles (small) part of its 10.8% rate hike   [Jan-23-18 01:25PM  American City Business Journals]
▶ Looking at Duke Energys Price Targets and Ratings   [Jan-22-18 02:50PM  Market Realist]
▶ Duke Energy will prepare climate-risk report demanded by shareholders   [12:40PM  American City Business Journals]
▶ Where NextEra Energy Stock Could Go from Here   [07:34AM  Market Realist]
▶ How NextEra Energy Stock Is Currently Valued   [Jan-18-18 05:45PM  Market Realist]
▶ 52-Week Company Lows   [10:58AM  GuruFocus.com]
▶ Piedmont Natural Gas scores high in business-customer survey   [02:25PM  American City Business Journals]
▶ Which Utility Is the Best Dividend Stock?   [Jan-16-18 02:14PM  Motley Fool]
▶ Duke Energys Constitution Pipeline suffers a new setback   [03:30PM  American City Business Journals]
Financial statements of DUK
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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