Intrinsic value of Loews - L

Previous Close

$45.95

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$45.95

 
Intrinsic value

$49.85

 
Up/down potential

+8%

 
Rating

hold

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying
Our model is not good at valuating stocks of financial companies, such as L.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of L 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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 15.4

 

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, %
  -2.84
  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
  0
  13,450
  13,759
  14,113
  14,510
  14,950
  15,432
  15,958
  16,527
  17,140
  17,797
  18,501
  19,252
  20,051
  20,901
  21,803
  22,758
  23,770
  24,839
  25,969
  27,162
  28,421
  29,749
  31,149
  32,623
  34,177
  35,812
  37,533
  39,344
  41,250
  43,254
Variable operating expenses, $m
 
  12,696
  12,987
  13,320
  13,694
  14,108
  14,562
  15,057
  15,592
  16,169
  16,789
  17,416
  18,123
  18,876
  19,676
  20,525
  21,424
  22,376
  23,383
  24,447
  25,570
  26,755
  28,005
  29,323
  30,711
  32,173
  33,712
  35,333
  37,038
  38,831
  40,718
Fixed operating expenses, $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
Total operating expenses, $m
  11,714
  12,696
  12,987
  13,320
  13,694
  14,108
  14,562
  15,057
  15,592
  16,169
  16,789
  17,416
  18,123
  18,876
  19,676
  20,525
  21,424
  22,376
  23,383
  24,447
  25,570
  26,755
  28,005
  29,323
  30,711
  32,173
  33,712
  35,333
  37,038
  38,831
  40,718
Operating income, $m
  1,472
  754
  772
  793
  816
  842
  870
  901
  934
  970
  1,009
  1,085
  1,129
  1,175
  1,225
  1,278
  1,334
  1,393
  1,456
  1,522
  1,592
  1,666
  1,744
  1,826
  1,913
  2,004
  2,099
  2,200
  2,307
  2,418
  2,536
EBITDA, $m
  2,313
  1,607
  1,644
  1,686
  1,733
  1,786
  1,844
  1,906
  1,974
  2,048
  2,126
  2,210
  2,300
  2,395
  2,497
  2,605
  2,719
  2,840
  2,967
  3,102
  3,245
  3,395
  3,554
  3,721
  3,897
  4,083
  4,278
  4,484
  4,700
  4,928
  5,167
Interest expense (income), $m
  511
  517
  577
  642
  718
  802
  896
  999
  1,111
  1,232
  1,362
  1,502
  1,652
  1,812
  1,982
  2,163
  2,355
  2,559
  2,774
  3,002
  3,242
  3,496
  3,764
  4,047
  4,345
  4,659
  4,990
  5,338
  5,705
  6,090
  6,496
Earnings before tax, $m
  936
  237
  196
  150
  98
  40
  -26
  -98
  -176
  -261
  -353
  -418
  -523
  -636
  -757
  -885
  -1,021
  -1,165
  -1,318
  -1,479
  -1,650
  -1,830
  -2,020
  -2,221
  -2,433
  -2,656
  -2,890
  -3,138
  -3,398
  -3,672
  -3,960
Tax expense, $m
  220
  64
  53
  41
  27
  11
  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
Net income, $m
  654
  173
  143
  110
  72
  29
  -26
  -98
  -176
  -261
  -353
  -418
  -523
  -636
  -757
  -885
  -1,021
  -1,165
  -1,318
  -1,479
  -1,650
  -1,830
  -2,020
  -2,221
  -2,433
  -2,656
  -2,890
  -3,138
  -3,398
  -3,672
  -3,960

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  76,594
  78,196
  79,995
  82,050
  84,358
  86,916
  89,722
  92,778
  96,085
  99,649
  103,473
  107,564
  111,930
  116,578
  121,518
  126,760
  132,315
  138,195
  144,413
  150,984
  157,921
  165,241
  172,961
  181,098
  189,671
  198,701
  208,208
  218,215
  228,745
  239,823
  251,475
Adjusted assets (=assets-cash), $m
  76,594
  78,196
  79,995
  82,050
  84,358
  86,916
  89,722
  92,778
  96,085
  99,649
  103,473
  107,564
  111,930
  116,578
  121,518
  126,760
  132,315
  138,195
  144,413
  150,984
  157,921
  165,241
  172,961
  181,098
  189,671
  198,701
  208,208
  218,215
  228,745
  239,823
  251,475
Revenue / Adjusted assets
  0.000
  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
  7,615
  7,774
  7,953
  8,157
  8,387
  8,641
  8,920
  9,224
  9,552
  9,907
  10,287
  10,694
  11,128
  11,590
  12,081
  12,602
  13,154
  13,739
  14,357
  15,010
  15,700
  16,428
  17,195
  18,004
  18,856
  19,754
  20,699
  21,694
  22,741
  23,842
  25,001
Working capital, $m
  0
  108
  110
  113
  116
  120
  123
  128
  132
  137
  142
  148
  154
  160
  167
  174
  182
  190
  199
  208
  217
  227
  238
  249
  261
  273
  286
  300
  315
  330
  346
Total debt, $m
  10,778
  12,011
  13,383
  14,951
  16,713
  18,664
  20,805
  23,136
  25,660
  28,379
  31,297
  34,419
  37,750
  41,296
  45,065
  49,065
  53,303
  57,790
  62,534
  67,548
  72,841
  78,426
  84,316
  90,525
  97,066
  103,956
  111,210
  118,845
  126,879
  135,332
  144,223
Total liabilities, $m
  58,431
  59,664
  61,036
  62,604
  64,366
  66,317
  68,458
  70,789
  73,313
  76,032
  78,950
  82,072
  85,403
  88,949
  92,718
  96,718
  100,956
  105,443
  110,187
  115,201
  120,494
  126,079
  131,969
  138,178
  144,719
  151,609
  158,863
  166,498
  174,532
  182,985
  191,876
Total equity, $m
  18,163
  18,532
  18,959
  19,446
  19,993
  20,599
  21,264
  21,988
  22,772
  23,617
  24,523
  25,493
  26,527
  27,629
  28,800
  30,042
  31,359
  32,752
  34,226
  35,783
  37,427
  39,162
  40,992
  42,920
  44,952
  47,092
  49,345
  51,717
  54,213
  56,838
  59,600
Total liabilities and equity, $m
  76,594
  78,196
  79,995
  82,050
  84,359
  86,916
  89,722
  92,777
  96,085
  99,649
  103,473
  107,565
  111,930
  116,578
  121,518
  126,760
  132,315
  138,195
  144,413
  150,984
  157,921
  165,241
  172,961
  181,098
  189,671
  198,701
  208,208
  218,215
  228,745
  239,823
  251,476
Debt-to-equity ratio
  0.593
  0.650
  0.710
  0.770
  0.840
  0.910
  0.980
  1.050
  1.130
  1.200
  1.280
  1.350
  1.420
  1.490
  1.560
  1.630
  1.700
  1.760
  1.830
  1.890
  1.950
  2.000
  2.060
  2.110
  2.160
  2.210
  2.250
  2.300
  2.340
  2.380
  2.420
Adjusted equity ratio
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  654
  173
  143
  110
  72
  29
  -26
  -98
  -176
  -261
  -353
  -418
  -523
  -636
  -757
  -885
  -1,021
  -1,165
  -1,318
  -1,479
  -1,650
  -1,830
  -2,020
  -2,221
  -2,433
  -2,656
  -2,890
  -3,138
  -3,398
  -3,672
  -3,960
Depreciation, amort., depletion, $m
  841
  853
  872
  893
  917
  944
  974
  1,006
  1,040
  1,077
  1,117
  1,126
  1,171
  1,220
  1,272
  1,327
  1,385
  1,446
  1,511
  1,580
  1,653
  1,729
  1,810
  1,895
  1,985
  2,079
  2,179
  2,284
  2,394
  2,510
  2,632
Funds from operations, $m
  1,883
  1,026
  1,014
  1,003
  989
  973
  948
  908
  864
  816
  764
  708
  648
  583
  515
  442
  364
  281
  194
  101
  3
  -101
  -210
  -326
  -448
  -576
  -712
  -854
  -1,004
  -1,162
  -1,329
Change in working capital, $m
  -370
  2
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
Cash from operations, $m
  2,253
  8,638
  1,012
  1,000
  986
  970
  944
  904
  859
  811
  759
  702
  642
  577
  508
  434
  356
  273
  185
  92
  -7
  -111
  -221
  -337
  -460
  -589
  -725
  -868
  -1,019
  -1,178
  -1,345
Maintenance CAPEX, $m
  0
  -802
  -818
  -837
  -859
  -883
  -910
  -939
  -971
  -1,006
  -1,043
  -1,083
  -1,126
  -1,171
  -1,220
  -1,272
  -1,327
  -1,385
  -1,446
  -1,511
  -1,580
  -1,653
  -1,729
  -1,810
  -1,895
  -1,985
  -2,079
  -2,179
  -2,284
  -2,394
  -2,510
New CAPEX, $m
  -1,450
  -159
  -179
  -204
  -229
  -254
  -279
  -304
  -329
  -354
  -380
  -407
  -434
  -462
  -491
  -521
  -552
  -585
  -618
  -653
  -690
  -728
  -767
  -809
  -852
  -898
  -945
  -995
  -1,047
  -1,101
  -1,158
Cash from investing activities, $m
  -2,187
  -961
  -997
  -1,041
  -1,088
  -1,137
  -1,189
  -1,243
  -1,300
  -1,360
  -1,423
  -1,490
  -1,560
  -1,633
  -1,711
  -1,793
  -1,879
  -1,970
  -2,064
  -2,164
  -2,270
  -2,381
  -2,496
  -2,619
  -2,747
  -2,883
  -3,024
  -3,174
  -3,331
  -3,495
  -3,668
Free cash flow, $m
  66
  7,678
  15
  -41
  -102
  -168
  -245
  -339
  -440
  -549
  -664
  -787
  -918
  -1,056
  -1,203
  -1,358
  -1,523
  -1,696
  -1,879
  -2,073
  -2,277
  -2,491
  -2,718
  -2,956
  -3,207
  -3,471
  -3,749
  -4,042
  -4,349
  -4,673
  -5,013
Issuance/(repayment) of debt, $m
  196
  1,233
  1,372
  1,569
  1,761
  1,951
  2,141
  2,331
  2,524
  2,719
  2,918
  3,122
  3,331
  3,547
  3,769
  4,000
  4,238
  4,487
  4,745
  5,013
  5,293
  5,585
  5,890
  6,209
  6,541
  6,890
  7,254
  7,635
  8,034
  8,453
  8,891
Issuance/(repurchase) of shares, $m
  -134
  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  
  -82
  1,233
  1,372
  1,569
  1,761
  1,951
  2,141
  2,331
  2,524
  2,719
  2,918
  3,122
  3,331
  3,547
  3,769
  4,000
  4,238
  4,487
  4,745
  5,013
  5,293
  5,585
  5,890
  6,209
  6,541
  6,890
  7,254
  7,635
  8,034
  8,453
  8,891
Total cash flow (excl. dividends), $m
  -29
  8,911
  1,387
  1,527
  1,659
  1,784
  1,896
  1,992
  2,083
  2,170
  2,254
  2,334
  2,413
  2,490
  2,566
  2,641
  2,716
  2,790
  2,865
  2,940
  3,017
  3,094
  3,172
  3,252
  3,334
  3,418
  3,505
  3,594
  3,685
  3,780
  3,878
Retained Cash Flow (-), $m
  -602
  -369
  -426
  -487
  -547
  -606
  -665
  -724
  -784
  -845
  -906
  -970
  -1,035
  -1,102
  -1,171
  -1,242
  -1,317
  -1,394
  -1,474
  -1,557
  -1,644
  -1,735
  -1,830
  -1,928
  -2,032
  -2,140
  -2,253
  -2,372
  -2,496
  -2,626
  -2,762
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
 
  8,541
  961
  1,040
  1,112
  1,178
  1,231
  1,268
  1,299
  1,326
  1,347
  1,365
  1,378
  1,389
  1,395
  1,399
  1,399
  1,397
  1,391
  1,383
  1,372
  1,359
  1,343
  1,324
  1,303
  1,278
  1,252
  1,222
  1,190
  1,154
  1,116
Discount rate, %
 
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
 
  8,005
  839
  840
  825
  796
  753
  695
  632
  567
  501
  437
  375
  317
  264
  216
  174
  137
  106
  81
  60
  44
  31
  22
  15
  10
  6
  4
  2
  1
  1
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

Loews Corporation, through its subsidiaries, provides commercial property and casualty insurance in the United States, Canada, the United Kingdom, Continental Europe, and Singapore. The company offers management and professional liability insurance and risk management services, and other specialized property and casualty coverages; commercial surety and fidelity bonds; and warranty and alternative risk services primarily for vehicles and portable electronic communication devices. Its commercial property insurance products include standard and excess property, marine, and boiler and machinery coverages; and casualty insurance products comprise workersÂ’ compensation, general and product liability, commercial auto, and umbrella coverages. The company also provides loss-sensitive insurance programs; and risk management, information, and claims administration services; and long term care and life settlement contracts. It markets its insurance products and services primarily through independent agents, brokers, and managing general underwriters to various customers. In addition, the company owns and operates 24 offshore drilling rigs consisting of 4 drillships, 19 semisubmersible rigs, and 1 jack-ups for companies engaged in the exploration and production of hydrocarbons. Further, it is involved in the transportation and storage of natural gas and natural gas liquids (NGLs), and gathering and processing of natural gas. It owns and operates natural gas pipelines covering approximately 13,930 miles of interconnected pipelines; approximately 435 miles of NGL pipelines in Louisiana and Texas; and underground storage fields with aggregate working gas capacity of approximately 205.0 billion cubic feet of natural gas. Additionally, it operates 24 hotels in the United States and 1 hotel in Canada. The company was founded in 1954 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  Loews (L)

Valuation Ratios
P/E Ratio 23.7
Price to Sales 1.2
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 6.9
Price to Free Cash Flow 19.3
Growth Rates
Sales Growth Rate -2.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.8%
Cap. Spend. - 3 Yr. Gr. Rate -3.5%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 58.7%
Total Debt to Equity 59.3%
Interest Coverage 3
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 1.2%
Return On Total Capital 2.3%
Ret/ On T. Cap. - 3 Yr. Avg. 1.7%
Return On Equity 3.7%
Return On Equity - 3 Yr. Avg. 2.7%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 17.4%
EBITDA Margin - 3 Yr. Avg. 17.4%
Operating Margin 11.2%
Oper. Margin - 3 Yr. Avg. 10.9%
Pre-Tax Margin 7.1%
Pre-Tax Margin - 3 Yr. Avg. 7.2%
Net Profit Margin 5%
Net Profit Margin - 3 Yr. Avg. 3.7%
Effective Tax Rate 23.5%
Eff/ Tax Rate - 3 Yr. Avg. 10.4%
Payout Ratio 12.8%

L stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the L stock intrinsic value calculation we used $13186 million for the last fiscal year's total revenue generated by Loews. The default revenue input number comes from 2016 income statement of Loews. 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 L 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 6.7%, whose default value for L is calculated based on our internal credit rating of Loews, 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 Loews.
    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 L stock the variable cost ratio is equal to 94.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for L 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 4.8% for Loews.

Corporate tax rate of 27% is the nominal tax rate for Loews. 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 L 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 L are equal to 57.8%.

Life of production assets of 9.5 years is the average useful life of capital assets used in Loews 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 L is equal to 0.8%. 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 - $18163 million for Loews - 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 336.113 million for Loews 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 Loews at the current share price and the inputted number of shares is $15.4 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
HIG Hartford Finan 47.28 148.41  str.buy
WRB W.R. Berkley 68.01 178.41  str.buy
OB OneBeacon Insu 16.05 6.20  str.sell
TRV Travelers Cos. 119.10 391.74  str.buy
CB Chubb 135.48 8,096.05  str.buy
THG Hanover Insura 87.80 163.19  str.buy
CNA CNA Financial 44.01 66.34  str.buy
MKL Markel 969.28 651.03  sell
RLI RLI 54.50 57.59  hold

COMPANY NEWS

▶ Loews to Buy Consolidated Container for $1.2 Bln   [Apr-11-17 01:32PM  Investopedia]
▶ Bain-owned Consolidated Container bought by Loews for $1.2B   [11:25AM  American City Business Journals]
▶ Tisch Sons Making $925,000 Each at Loews   [Mar-29-17 11:44AM  Bloomberg]
▶ Is bad weather good news for home improvement stocks?   [Mar-14-17 01:43PM  CNBC Videos]
▶ What Happened in the Stock Market Today   [Feb-23-17 05:01PM  Motley Fool]
▶ What Happened in the Stock Market Today   [05:01PM  at Motley Fool]
▶ What Could Drive Cheniere Energys 4Q16 Revenue Growth   [Feb-21-17 12:21PM  Market Realist]
▶ W W Grainger Inc (GWW): Are Hedge Funds Right About This Stock?   [Dec-08-16 01:31PM  at Insider Monkey]
▶ Is Loews Corporation (L) Going to Burn These Hedge Funds?   [Nov-29-16 01:04PM  at Insider Monkey]
▶ BP Reconfirms Commitment to Ocean GreatWhite Contract   [Oct-10-16 11:57PM  PR Newswire]
Stock chart of L Financial statements of L
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.