Intrinsic value of Monsanto - MON

Previous Close

$122.42

  Intrinsic Value

$44.90

stock screener

  Rating & Target

str. sell

-63%

  Value-price divergence*

-72%

Previous close

$122.42

 
Intrinsic value

$44.90

 
Up/down potential

-63%

 
Rating

str. sell

 
Value-price divergence*

-72%

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

We calculate the intrinsic value of MON 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 53.9

 

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, %
  -9.99
  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
  13,502
  13,772
  14,089
  14,451
  14,857
  15,308
  15,802
  16,340
  16,923
  17,550
  18,224
  18,944
  19,713
  20,532
  21,402
  22,325
  23,304
  24,339
  25,434
  26,592
  27,813
  29,103
  30,462
  31,895
  33,405
  34,996
  36,670
  38,432
  40,287
  42,238
  44,290
Variable operating expenses, $m
 
  3,215
  3,279
  3,353
  3,436
  3,528
  3,629
  3,739
  3,858
  3,986
  4,124
  3,869
  4,026
  4,193
  4,371
  4,559
  4,759
  4,971
  5,194
  5,431
  5,680
  5,944
  6,221
  6,514
  6,822
  7,147
  7,489
  7,849
  8,228
  8,626
  9,045
Fixed operating expenses, $m
 
  8,368
  8,577
  8,792
  9,012
  9,237
  9,468
  9,704
  9,947
  10,196
  10,451
  10,712
  10,980
  11,254
  11,536
  11,824
  12,120
  12,422
  12,733
  13,051
  13,378
  13,712
  14,055
  14,406
  14,766
  15,136
  15,514
  15,902
  16,299
  16,707
  17,125
Total operating expenses, $m
  11,127
  11,583
  11,856
  12,145
  12,448
  12,765
  13,097
  13,443
  13,805
  14,182
  14,575
  14,581
  15,006
  15,447
  15,907
  16,383
  16,879
  17,393
  17,927
  18,482
  19,058
  19,656
  20,276
  20,920
  21,588
  22,283
  23,003
  23,751
  24,527
  25,333
  26,170
Operating income, $m
  2,375
  2,189
  2,232
  2,306
  2,410
  2,543
  2,705
  2,897
  3,118
  3,368
  3,649
  4,364
  4,708
  5,085
  5,496
  5,942
  6,425
  6,946
  7,507
  8,109
  8,755
  9,447
  10,186
  10,975
  11,817
  12,713
  13,667
  14,682
  15,760
  16,905
  18,121
EBITDA, $m
  3,102
  3,043
  3,096
  3,182
  3,299
  3,447
  3,625
  3,835
  4,075
  4,346
  4,649
  4,985
  5,354
  5,758
  6,198
  6,674
  7,189
  7,744
  8,341
  8,982
  9,668
  10,401
  11,185
  12,021
  12,912
  13,861
  14,870
  15,942
  17,081
  18,290
  19,573
Interest expense (income), $m
  387
  320
  333
  346
  362
  380
  399
  421
  444
  469
  497
  526
  557
  591
  626
  664
  704
  746
  791
  839
  889
  942
  998
  1,057
  1,119
  1,185
  1,254
  1,326
  1,403
  1,483
  1,568
Earnings before tax, $m
  1,991
  1,869
  1,899
  1,959
  2,047
  2,163
  2,306
  2,476
  2,673
  2,899
  3,153
  3,838
  4,150
  4,494
  4,870
  5,278
  5,721
  6,200
  6,716
  7,271
  7,866
  8,505
  9,188
  9,918
  10,697
  11,528
  12,413
  13,355
  14,357
  15,422
  16,552
Tax expense, $m
  695
  505
  513
  529
  553
  584
  623
  668
  722
  783
  851
  1,036
  1,121
  1,213
  1,315
  1,425
  1,545
  1,674
  1,813
  1,963
  2,124
  2,296
  2,481
  2,678
  2,888
  3,113
  3,352
  3,606
  3,876
  4,164
  4,469
Net income, $m
  1,336
  1,364
  1,387
  1,430
  1,495
  1,579
  1,683
  1,807
  1,952
  2,116
  2,302
  2,802
  3,030
  3,281
  3,555
  3,853
  4,176
  4,526
  4,902
  5,308
  5,742
  6,209
  6,707
  7,240
  7,809
  8,416
  9,062
  9,749
  10,481
  11,258
  12,083

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,858
  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
  19,736
  18,241
  18,661
  19,140
  19,679
  20,275
  20,930
  21,643
  22,414
  23,245
  24,138
  25,092
  26,110
  27,195
  28,347
  29,570
  30,866
  32,237
  33,688
  35,221
  36,839
  38,547
  40,347
  42,245
  44,245
  46,352
  48,570
  50,904
  53,360
  55,945
  58,663
Adjusted assets (=assets-cash), $m
  17,878
  18,241
  18,661
  19,140
  19,679
  20,275
  20,930
  21,643
  22,414
  23,245
  24,138
  25,092
  26,110
  27,195
  28,347
  29,570
  30,866
  32,237
  33,688
  35,221
  36,839
  38,547
  40,347
  42,245
  44,245
  46,352
  48,570
  50,904
  53,360
  55,945
  58,663
Revenue / Adjusted assets
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
Average production assets, $m
  6,331
  6,459
  6,608
  6,777
  6,968
  7,179
  7,411
  7,664
  7,937
  8,231
  8,547
  8,885
  9,246
  9,629
  10,038
  10,471
  10,929
  11,415
  11,929
  12,471
  13,044
  13,649
  14,287
  14,959
  15,667
  16,413
  17,198
  18,025
  18,895
  19,810
  20,772
Working capital, $m
  1,428
  1,184
  1,212
  1,243
  1,278
  1,316
  1,359
  1,405
  1,455
  1,509
  1,567
  1,629
  1,695
  1,766
  1,841
  1,920
  2,004
  2,093
  2,187
  2,287
  2,392
  2,503
  2,620
  2,743
  2,873
  3,010
  3,154
  3,305
  3,465
  3,632
  3,809
Total debt, $m
  9,040
  7,738
  8,057
  8,423
  8,833
  9,288
  9,787
  10,330
  10,918
  11,551
  12,231
  12,958
  13,734
  14,560
  15,438
  16,370
  17,358
  18,403
  19,508
  20,676
  21,909
  23,210
  24,583
  26,029
  27,553
  29,158
  30,848
  32,627
  34,499
  36,468
  38,539
Total liabilities, $m
  15,202
  13,900
  14,219
  14,585
  14,995
  15,450
  15,949
  16,492
  17,080
  17,713
  18,393
  19,120
  19,896
  20,722
  21,600
  22,532
  23,520
  24,565
  25,670
  26,838
  28,071
  29,372
  30,745
  32,191
  33,715
  35,320
  37,010
  38,789
  40,661
  42,630
  44,701
Total equity, $m
  4,534
  4,341
  4,441
  4,555
  4,684
  4,826
  4,981
  5,151
  5,335
  5,532
  5,745
  5,972
  6,214
  6,472
  6,747
  7,038
  7,346
  7,672
  8,018
  8,383
  8,768
  9,174
  9,603
  10,054
  10,530
  11,032
  11,560
  12,115
  12,700
  13,315
  13,962
Total liabilities and equity, $m
  19,736
  18,241
  18,660
  19,140
  19,679
  20,276
  20,930
  21,643
  22,415
  23,245
  24,138
  25,092
  26,110
  27,194
  28,347
  29,570
  30,866
  32,237
  33,688
  35,221
  36,839
  38,546
  40,348
  42,245
  44,245
  46,352
  48,570
  50,904
  53,361
  55,945
  58,663
Debt-to-equity ratio
  1.994
  1.780
  1.810
  1.850
  1.890
  1.920
  1.960
  2.010
  2.050
  2.090
  2.130
  2.170
  2.210
  2.250
  2.290
  2.330
  2.360
  2.400
  2.430
  2.470
  2.500
  2.530
  2.560
  2.590
  2.620
  2.640
  2.670
  2.690
  2.720
  2.740
  2.760
Adjusted equity ratio
  0.150
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238
  0.238

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,336
  1,364
  1,387
  1,430
  1,495
  1,579
  1,683
  1,807
  1,952
  2,116
  2,302
  2,802
  3,030
  3,281
  3,555
  3,853
  4,176
  4,526
  4,902
  5,308
  5,742
  6,209
  6,707
  7,240
  7,809
  8,416
  9,062
  9,749
  10,481
  11,258
  12,083
Depreciation, amort., depletion, $m
  727
  854
  864
  876
  889
  904
  920
  938
  957
  978
  1,000
  621
  647
  673
  702
  732
  764
  798
  834
  872
  912
  954
  999
  1,046
  1,096
  1,148
  1,203
  1,260
  1,321
  1,385
  1,453
Funds from operations, $m
  2,605
  2,218
  2,251
  2,306
  2,384
  2,483
  2,603
  2,745
  2,909
  3,094
  3,301
  3,423
  3,676
  3,954
  4,257
  4,585
  4,941
  5,324
  5,737
  6,180
  6,655
  7,163
  7,706
  8,286
  8,905
  9,563
  10,264
  11,010
  11,802
  12,643
  13,536
Change in working capital, $m
  17
  23
  27
  31
  35
  39
  43
  46
  50
  54
  58
  62
  66
  70
  75
  79
  84
  89
  94
  100
  105
  111
  117
  123
  130
  137
  144
  152
  159
  168
  176
Cash from operations, $m
  2,588
  2,195
  2,223
  2,275
  2,349
  2,444
  2,561
  2,699
  2,859
  3,040
  3,243
  3,361
  3,610
  3,884
  4,182
  4,506
  4,856
  5,235
  5,642
  6,080
  6,550
  7,052
  7,589
  8,163
  8,775
  9,427
  10,120
  10,858
  11,642
  12,475
  13,359
Maintenance CAPEX, $m
  0
  -443
  -452
  -462
  -474
  -487
  -502
  -518
  -536
  -555
  -576
  -598
  -621
  -647
  -673
  -702
  -732
  -764
  -798
  -834
  -872
  -912
  -954
  -999
  -1,046
  -1,096
  -1,148
  -1,203
  -1,260
  -1,321
  -1,385
New CAPEX, $m
  -992
  -129
  -149
  -170
  -191
  -211
  -232
  -252
  -273
  -294
  -316
  -338
  -361
  -384
  -408
  -433
  -459
  -486
  -514
  -543
  -573
  -605
  -638
  -672
  -708
  -746
  -785
  -827
  -870
  -915
  -962
Cash from investing activities, $m
  -864
  -572
  -601
  -632
  -665
  -698
  -734
  -770
  -809
  -849
  -892
  -936
  -982
  -1,031
  -1,081
  -1,135
  -1,191
  -1,250
  -1,312
  -1,377
  -1,445
  -1,517
  -1,592
  -1,671
  -1,754
  -1,842
  -1,933
  -2,030
  -2,130
  -2,236
  -2,347
Free cash flow, $m
  1,724
  1,623
  1,623
  1,643
  1,684
  1,746
  1,827
  1,928
  2,049
  2,190
  2,352
  2,425
  2,628
  2,853
  3,100
  3,371
  3,665
  3,985
  4,330
  4,703
  5,104
  5,535
  5,997
  6,492
  7,021
  7,585
  8,187
  8,829
  9,512
  10,239
  11,012
Issuance/(repayment) of debt, $m
  156
  285
  320
  365
  410
  455
  499
  543
  588
  633
  680
  727
  776
  826
  878
  932
  987
  1,045
  1,105
  1,168
  1,233
  1,301
  1,372
  1,446
  1,524
  1,605
  1,690
  1,779
  1,872
  1,969
  2,071
Issuance/(repurchase) of shares, $m
  -2,920
  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  
  -2,778
  285
  320
  365
  410
  455
  499
  543
  588
  633
  680
  727
  776
  826
  878
  932
  987
  1,045
  1,105
  1,168
  1,233
  1,301
  1,372
  1,446
  1,524
  1,605
  1,690
  1,779
  1,872
  1,969
  2,071
Total cash flow (excl. dividends), $m
  -1,061
  1,908
  1,943
  2,009
  2,095
  2,200
  2,326
  2,471
  2,637
  2,824
  3,032
  3,152
  3,404
  3,679
  3,979
  4,303
  4,653
  5,030
  5,436
  5,871
  6,338
  6,837
  7,370
  7,938
  8,545
  9,190
  9,877
  10,608
  11,384
  12,208
  13,083
Retained Cash Flow (-), $m
  2,456
  -78
  -100
  -114
  -128
  -142
  -156
  -170
  -184
  -198
  -212
  -227
  -242
  -258
  -274
  -291
  -308
  -326
  -345
  -365
  -385
  -406
  -429
  -452
  -476
  -501
  -528
  -556
  -585
  -615
  -647
Prev. year cash balance distribution, $m
 
  271
  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
 
  2,101
  1,843
  1,895
  1,966
  2,058
  2,170
  2,302
  2,454
  2,626
  2,819
  2,925
  3,162
  3,421
  3,704
  4,012
  4,344
  4,704
  5,091
  5,506
  5,952
  6,430
  6,941
  7,486
  8,069
  8,689
  9,349
  10,052
  10,799
  11,593
  12,436
Discount rate, %
 
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
 
  1,963
  1,599
  1,516
  1,440
  1,368
  1,299
  1,229
  1,157
  1,083
  1,006
  892
  814
  734
  653
  573
  494
  419
  350
  286
  229
  180
  138
  103
  75
  54
  37
  25
  16
  10
  6
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

Monsanto Company (Monsanto), along with its subsidiaries, is a provider of agricultural products for farmers. The Company provides seeds, biotechnology trait products, herbicides and digital agriculture tools to farmers. The Company operates through two segments: Seeds and Genomics, and Agricultural Productivity. Through its Seeds and Genomics segment, the Company produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and it develops biotechnology traits that assist farmers in controlling insects and weeds and digital agriculture to assist farmers in decision-making. The Seeds and Genomics segment offers products, such as Germplasm and Biotechnology traits. Through its Agricultural Productivity segment, the Company manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market.

FINANCIAL RATIOS  of  Monsanto (MON)

Valuation Ratios
P/E Ratio 40.1
Price to Sales 4
Price to Book 11.8
Price to Tangible Book
Price to Cash Flow 20.7
Price to Free Cash Flow 33.6
Growth Rates
Sales Growth Rate -10%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.3%
Cap. Spend. - 3 Yr. Gr. Rate 3.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 164.4%
Total Debt to Equity 199.4%
Interest Coverage 6
Management Effectiveness
Return On Assets 7.6%
Ret/ On Assets - 3 Yr. Avg. 10.9%
Return On Total Capital 9%
Ret/ On T. Cap. - 3 Yr. Avg. 13.9%
Return On Equity 23.2%
Return On Equity - 3 Yr. Avg. 27%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 52%
Gross Margin - 3 Yr. Avg. 53.5%
EBITDA Margin 23%
EBITDA Margin - 3 Yr. Avg. 26.9%
Operating Margin 17.6%
Oper. Margin - 3 Yr. Avg. 22.3%
Pre-Tax Margin 14.7%
Pre-Tax Margin - 3 Yr. Avg. 20%
Net Profit Margin 9.9%
Net Profit Margin - 3 Yr. Avg. 14.2%
Effective Tax Rate 34.9%
Eff/ Tax Rate - 3 Yr. Avg. 30.1%
Payout Ratio 72.2%

MON stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MON stock intrinsic value calculation we used $13502 million for the last fiscal year's total revenue generated by Monsanto. The default revenue input number comes from 2016 income statement of Monsanto. 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 MON 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 7%, whose default value for MON is calculated based on our internal credit rating of Monsanto, 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 Monsanto.
    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 MON stock the variable cost ratio is equal to 23.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8164 million in the base year in the intrinsic value calculation for MON 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 4.3% for Monsanto.

Corporate tax rate of 27% is the nominal tax rate for Monsanto. 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 MON 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 MON are equal to 46.9%.

Life of production assets of 14.3 years is the average useful life of capital assets used in Monsanto 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 MON is equal to 8.6%. 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 - $4534 million for Monsanto - 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 439.966 million for Monsanto 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 Monsanto at the current share price and the inputted number of shares is $53.9 billion.

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COMPANY NEWS

▶ Bayer crop science deal won't include KC facility   [04:30PM  American City Business Journals]
▶ [$$] Bayer to Sell Assets to BASF for $7 Billion   [03:18PM  The Wall Street Journal]
▶ Monsanto deal prompts Bayer to sell pieces of unit with big KC presence   [03:07PM  American City Business Journals]
▶ Monsanto up nearly 2%   [01:09PM  CNBC Videos]
▶ Bayer to sell assets to BASF, 300 in RTP impacted   [10:39AM  American City Business Journals]
▶ 3 Growth Stocks With Virtual Monopolies   [Oct-12-17 09:30PM  Motley Fool]
▶ [$$] Seed Giants See Fresh Start in Gene-Editing   [Oct-10-17 01:54PM  The Wall Street Journal]
▶ Monsantos 4Q17 Gross Margins by Segment   [Oct-05-17 11:35AM  Market Realist]
▶ [$$] Monsanto Boosted by Continued Adoption of New Products   [12:33AM  The Wall Street Journal]
▶ [$$] Monsanto Boosted by Continued Adoption of New Products   [03:53PM  The Wall Street Journal]
▶ Monsanto beats 4Q profit forecasts   [08:16AM  Associated Press]
▶ Monsanto to Release Fiscal 2017 4th Quarter Figures   [Oct-03-17 11:52AM  GuruFocus.com]
▶ Analysts Pre-4Q17 Views on Monsanto   [07:38AM  Market Realist]
▶ What to Expect For Monsantos 4Q17 Earnings   [07:43AM  Market Realist]
▶ "Fast Money" final trades: CMG, APRN and more   [Sep-20-17 05:59PM  CNBC Videos]
▶ Monsanto: A Top 10 Agricultural Chemicals Stock   [Sep-15-17 05:06PM  Market Realist]
▶ [$$] Agricultural Giants Teach Computers to Farm   [01:01AM  The Wall Street Journal]
▶ European court sides with Italian farmer pushing GM crops   [Sep-13-17 11:37AM  Associated Press]
▶ New Bayer CFO to lead Monsanto integration   [07:45AM  American City Business Journals]
Financial statements of MON
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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