Intrinsic value of Omnicom Group - OMC

Previous Close

$68.87

  Intrinsic Value

$75.72

stock screener

  Rating & Target

hold

+10%

Previous close

$68.87

 
Intrinsic value

$75.72

 
Up/down potential

+10%

 
Rating

hold

We calculate the intrinsic value of OMC 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 15.9

 

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, %
  1.87
  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
  15,417
  15,725
  16,087
  16,500
  16,965
  17,479
  18,043
  18,658
  19,323
  20,040
  20,809
  21,631
  22,509
  23,444
  24,437
  25,492
  26,609
  27,791
  29,042
  30,363
  31,758
  33,230
  34,783
  36,419
  38,143
  39,959
  41,871
  43,883
  46,001
  48,229
  50,572
Variable operating expenses, $m
 
  10,770
  10,997
  11,256
  11,548
  11,870
  12,225
  12,611
  13,028
  13,478
  13,961
  13,580
  14,131
  14,718
  15,341
  16,003
  16,704
  17,447
  18,232
  19,061
  19,937
  20,861
  21,836
  22,863
  23,945
  25,085
  26,286
  27,549
  28,878
  30,277
  31,748
Fixed operating expenses, $m
 
  2,983
  3,057
  3,134
  3,212
  3,292
  3,375
  3,459
  3,546
  3,634
  3,725
  3,818
  3,914
  4,011
  4,112
  4,215
  4,320
  4,428
  4,539
  4,652
  4,768
  4,888
  5,010
  5,135
  5,263
  5,395
  5,530
  5,668
  5,810
  5,955
  6,104
Total operating expenses, $m
  13,408
  13,753
  14,054
  14,390
  14,760
  15,162
  15,600
  16,070
  16,574
  17,112
  17,686
  17,398
  18,045
  18,729
  19,453
  20,218
  21,024
  21,875
  22,771
  23,713
  24,705
  25,749
  26,846
  27,998
  29,208
  30,480
  31,816
  33,217
  34,688
  36,232
  37,852
Operating income, $m
  2,009
  1,973
  2,033
  2,110
  2,205
  2,316
  2,444
  2,588
  2,749
  2,927
  3,123
  4,233
  4,465
  4,715
  4,984
  5,274
  5,584
  5,917
  6,271
  6,650
  7,053
  7,481
  7,937
  8,421
  8,934
  9,479
  10,055
  10,666
  11,313
  11,997
  12,720
EBITDA, $m
  2,302
  2,907
  2,968
  3,046
  3,142
  3,254
  3,383
  3,529
  3,691
  3,871
  4,068
  4,283
  4,517
  4,769
  5,041
  5,333
  5,646
  5,981
  6,338
  6,720
  7,126
  7,558
  8,017
  8,505
  9,022
  9,571
  10,152
  10,767
  11,419
  12,108
  12,836
Interest expense (income), $m
  570
  590
  294
  345
  403
  469
  541
  621
  708
  801
  903
  1,011
  1,127
  1,251
  1,383
  1,524
  1,672
  1,830
  1,997
  2,174
  2,360
  2,557
  2,765
  2,984
  3,215
  3,458
  3,715
  3,985
  4,269
  4,568
  4,882
Earnings before tax, $m
  1,842
  1,383
  1,739
  1,766
  1,802
  1,848
  1,903
  1,967
  2,042
  2,126
  2,220
  3,222
  3,337
  3,464
  3,601
  3,750
  3,912
  4,087
  4,274
  4,476
  4,693
  4,924
  5,172
  5,437
  5,719
  6,020
  6,341
  6,682
  7,044
  7,429
  7,838
Tax expense, $m
  601
  373
  470
  477
  487
  499
  514
  531
  551
  574
  599
  870
  901
  935
  972
  1,013
  1,056
  1,103
  1,154
  1,209
  1,267
  1,330
  1,397
  1,468
  1,544
  1,625
  1,712
  1,804
  1,902
  2,006
  2,116
Net income, $m
  1,149
  1,009
  1,270
  1,289
  1,315
  1,349
  1,389
  1,436
  1,490
  1,552
  1,621
  2,352
  2,436
  2,528
  2,629
  2,738
  2,856
  2,983
  3,120
  3,268
  3,426
  3,595
  3,776
  3,969
  4,175
  4,395
  4,629
  4,878
  5,142
  5,423
  5,722

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,023
  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
  23,165
  20,556
  21,029
  21,569
  22,176
  22,848
  23,586
  24,389
  25,259
  26,195
  27,201
  28,276
  29,424
  30,646
  31,944
  33,322
  34,783
  36,328
  37,963
  39,690
  41,514
  43,438
  45,468
  47,607
  49,860
  52,234
  54,733
  57,364
  60,132
  63,044
  66,107
Adjusted assets (=assets-cash), $m
  20,142
  20,556
  21,029
  21,569
  22,176
  22,848
  23,586
  24,389
  25,259
  26,195
  27,201
  28,276
  29,424
  30,646
  31,944
  33,322
  34,783
  36,328
  37,963
  39,690
  41,514
  43,438
  45,468
  47,607
  49,860
  52,234
  54,733
  57,364
  60,132
  63,044
  66,107
Revenue / Adjusted assets
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
  0.765
Average production assets, $m
  1,070
  1,085
  1,110
  1,139
  1,171
  1,206
  1,245
  1,287
  1,333
  1,383
  1,436
  1,493
  1,553
  1,618
  1,686
  1,759
  1,836
  1,918
  2,004
  2,095
  2,191
  2,293
  2,400
  2,513
  2,632
  2,757
  2,889
  3,028
  3,174
  3,328
  3,489
Working capital, $m
  -1,289
  -4,372
  -4,472
  -4,587
  -4,716
  -4,859
  -5,016
  -5,187
  -5,372
  -5,571
  -5,785
  -6,014
  -6,258
  -6,517
  -6,794
  -7,087
  -7,397
  -7,726
  -8,074
  -8,441
  -8,829
  -9,238
  -9,670
  -10,125
  -10,604
  -11,109
  -11,640
  -12,200
  -12,788
  -13,408
  -14,059
Total debt, $m
  4,949
  2,446
  2,872
  3,358
  3,904
  4,509
  5,173
  5,896
  6,679
  7,522
  8,427
  9,395
  10,427
  11,527
  12,696
  13,936
  15,250
  16,642
  18,113
  19,667
  21,309
  23,040
  24,867
  26,792
  28,820
  30,957
  33,206
  35,573
  38,065
  40,686
  43,443
Total liabilities, $m
  21,003
  18,500
  18,926
  19,412
  19,958
  20,563
  21,227
  21,950
  22,733
  23,576
  24,481
  25,449
  26,481
  27,581
  28,750
  29,990
  31,304
  32,696
  34,167
  35,721
  37,363
  39,094
  40,921
  42,846
  44,874
  47,011
  49,260
  51,627
  54,119
  56,740
  59,497
Total equity, $m
  2,162
  2,056
  2,103
  2,157
  2,218
  2,285
  2,359
  2,439
  2,526
  2,620
  2,720
  2,828
  2,942
  3,065
  3,194
  3,332
  3,478
  3,633
  3,796
  3,969
  4,151
  4,344
  4,547
  4,761
  4,986
  5,223
  5,473
  5,736
  6,013
  6,304
  6,611
Total liabilities and equity, $m
  23,165
  20,556
  21,029
  21,569
  22,176
  22,848
  23,586
  24,389
  25,259
  26,196
  27,201
  28,277
  29,423
  30,646
  31,944
  33,322
  34,782
  36,329
  37,963
  39,690
  41,514
  43,438
  45,468
  47,607
  49,860
  52,234
  54,733
  57,363
  60,132
  63,044
  66,108
Debt-to-equity ratio
  2.289
  1.190
  1.370
  1.560
  1.760
  1.970
  2.190
  2.420
  2.640
  2.870
  3.100
  3.320
  3.540
  3.760
  3.970
  4.180
  4.380
  4.580
  4.770
  4.960
  5.130
  5.300
  5.470
  5.630
  5.780
  5.930
  6.070
  6.200
  6.330
  6.450
  6.570
Adjusted equity ratio
  -0.041
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,149
  1,009
  1,270
  1,289
  1,315
  1,349
  1,389
  1,436
  1,490
  1,552
  1,621
  2,352
  2,436
  2,528
  2,629
  2,738
  2,856
  2,983
  3,120
  3,268
  3,426
  3,595
  3,776
  3,969
  4,175
  4,395
  4,629
  4,878
  5,142
  5,423
  5,722
Depreciation, amort., depletion, $m
  293
  934
  935
  936
  937
  938
  939
  941
  942
  944
  945
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  80
  84
  88
  92
  96
  101
  106
  111
  116
Funds from operations, $m
  2,254
  1,943
  2,204
  2,225
  2,252
  2,286
  2,328
  2,377
  2,432
  2,496
  2,566
  2,402
  2,488
  2,582
  2,685
  2,796
  2,917
  3,047
  3,187
  3,337
  3,499
  3,671
  3,856
  4,053
  4,263
  4,487
  4,725
  4,978
  5,248
  5,534
  5,838
Change in working capital, $m
  323
  -86
  -101
  -115
  -129
  -143
  -157
  -171
  -185
  -199
  -214
  -229
  -244
  -260
  -276
  -293
  -311
  -329
  -348
  -367
  -388
  -409
  -432
  -455
  -479
  -505
  -532
  -559
  -589
  -619
  -651
Cash from operations, $m
  1,931
  2,029
  2,305
  2,340
  2,381
  2,429
  2,485
  2,547
  2,617
  2,695
  2,780
  2,631
  2,732
  2,842
  2,961
  3,090
  3,228
  3,376
  3,535
  3,705
  3,887
  4,080
  4,287
  4,508
  4,742
  4,991
  5,256
  5,538
  5,837
  6,153
  6,489
Maintenance CAPEX, $m
  0
  -36
  -36
  -37
  -38
  -39
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -84
  -88
  -92
  -96
  -101
  -106
  -111
New CAPEX, $m
  -166
  -16
  -25
  -29
  -32
  -35
  -39
  -42
  -46
  -49
  -53
  -57
  -61
  -64
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -102
  -107
  -113
  -119
  -125
  -132
  -139
  -146
  -154
  -162
Cash from investing activities, $m
  -482
  -52
  -61
  -66
  -70
  -74
  -79
  -83
  -89
  -93
  -99
  -105
  -111
  -116
  -123
  -129
  -136
  -143
  -150
  -158
  -166
  -175
  -183
  -193
  -203
  -213
  -224
  -235
  -247
  -260
  -273
Free cash flow, $m
  1,449
  1,978
  2,244
  2,274
  2,311
  2,355
  2,406
  2,464
  2,529
  2,601
  2,681
  2,526
  2,622
  2,726
  2,839
  2,961
  3,092
  3,233
  3,385
  3,547
  3,720
  3,906
  4,104
  4,315
  4,539
  4,778
  5,033
  5,303
  5,590
  5,894
  6,217
Issuance/(repayment) of debt, $m
  388
  -2,474
  426
  486
  546
  605
  664
  723
  783
  843
  905
  968
  1,033
  1,100
  1,169
  1,240
  1,314
  1,391
  1,471
  1,554
  1,641
  1,732
  1,826
  1,925
  2,028
  2,136
  2,249
  2,368
  2,491
  2,621
  2,757
Issuance/(repurchase) of shares, $m
  -602
  1,878
  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  
  -472
  -596
  426
  486
  546
  605
  664
  723
  783
  843
  905
  968
  1,033
  1,100
  1,169
  1,240
  1,314
  1,391
  1,471
  1,554
  1,641
  1,732
  1,826
  1,925
  2,028
  2,136
  2,249
  2,368
  2,491
  2,621
  2,757
Total cash flow (excl. dividends), $m
  902
  1,382
  2,669
  2,760
  2,857
  2,960
  3,070
  3,187
  3,311
  3,444
  3,586
  3,494
  3,655
  3,826
  4,007
  4,201
  4,406
  4,624
  4,856
  5,101
  5,362
  5,638
  5,930
  6,240
  6,568
  6,915
  7,282
  7,670
  8,081
  8,515
  8,974
Retained Cash Flow (-), $m
  290
  -2,888
  -47
  -54
  -61
  -67
  -74
  -80
  -87
  -94
  -101
  -108
  -115
  -122
  -130
  -138
  -146
  -155
  -163
  -173
  -182
  -192
  -203
  -214
  -225
  -237
  -250
  -263
  -277
  -291
  -306
Prev. year cash balance distribution, $m
 
  2,994
  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
 
  1,489
  2,622
  2,706
  2,796
  2,893
  2,996
  3,106
  3,224
  3,350
  3,485
  3,387
  3,540
  3,703
  3,878
  4,063
  4,260
  4,470
  4,692
  4,929
  5,179
  5,445
  5,727
  6,026
  6,342
  6,677
  7,032
  7,407
  7,804
  8,224
  8,667
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,427
  2,400
  2,355
  2,303
  2,242
  2,174
  2,099
  2,015
  1,925
  1,827
  1,608
  1,511
  1,408
  1,302
  1,193
  1,083
  973
  864
  759
  658
  563
  475
  395
  323
  260
  205
  159
  121
  90
  65
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Omnicom Group Inc. is a holding company. The Company provides advertising, marketing and corporate communications services. The Company's branded networks and agencies operate in all markets around the world and provide a range of services, which it groups into four disciplines: advertising, customer relationship management (CRM), public relations and specialty communications. The Company caters to various industry sectors, such as food and beverage, consumer products, pharmaceuticals and healthcare, financial services, technology, travel and entertainment, telecommunications and retail. The Company's branded networks and agencies conduct business on a global basis and operate in the geographic regions, such as The Americas, which includes North America and Latin America; EMEA, which includes Europe, the Middle East and Africa, and Asia Pacific, which includes Australia, China, India, Japan, Korea, New Zealand, Singapore and other Asian countries.

FINANCIAL RATIOS  of  Omnicom Group (OMC)

Valuation Ratios
P/E Ratio 14.1
Price to Sales 1
Price to Book 7.5
Price to Tangible Book
Price to Cash Flow 8.4
Price to Free Cash Flow 9.2
Growth Rates
Sales Growth Rate 1.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.2%
Cap. Spend. - 3 Yr. Gr. Rate -4.8%
Financial Strength
Quick Ratio 104
Current Ratio 0.1
LT Debt to Equity 227.6%
Total Debt to Equity 228.9%
Interest Coverage 4
Management Effectiveness
Return On Assets 6.8%
Ret/ On Assets - 3 Yr. Avg. 6%
Return On Total Capital 16.3%
Ret/ On T. Cap. - 3 Yr. Avg. 15.4%
Return On Equity 49.8%
Return On Equity - 3 Yr. Avg. 41.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 25.7%
Gross Margin - 3 Yr. Avg. 25.5%
EBITDA Margin 17.5%
EBITDA Margin - 3 Yr. Avg. 15.8%
Operating Margin 13%
Oper. Margin - 3 Yr. Avg. 12.8%
Pre-Tax Margin 11.9%
Pre-Tax Margin - 3 Yr. Avg. 11.8%
Net Profit Margin 7.5%
Net Profit Margin - 3 Yr. Avg. 7.3%
Effective Tax Rate 32.6%
Eff/ Tax Rate - 3 Yr. Avg. 32.7%
Payout Ratio 44%

OMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OMC stock intrinsic value calculation we used $15417 million for the last fiscal year's total revenue generated by Omnicom Group. The default revenue input number comes from 2016 income statement of Omnicom Group. 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 OMC 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 4.3%, whose default value for OMC is calculated based on our internal credit rating of Omnicom Group, 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 Omnicom Group.
    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 OMC stock the variable cost ratio is equal to 68.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2910 million in the base year in the intrinsic value calculation for OMC 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 12% for Omnicom Group.

Corporate tax rate of 27% is the nominal tax rate for Omnicom Group. 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 OMC 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 OMC are equal to 6.9%.

Life of production assets of 33.8 years is the average useful life of capital assets used in Omnicom Group 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 OMC is equal to -27.8%. 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 - $2162 million for Omnicom Group - 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 230.56 million for Omnicom Group 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 Omnicom Group at the current share price and the inputted number of shares is $15.9 billion.

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COMPANY NEWS

▶ Best Dividend Stocks This Month   [Nov-16-17 08:02AM  Simply Wall St.]
▶ 'The incredible edible egg' advertising tagline gets a tweak   [Nov-14-17 05:01PM  American City Business Journals]
▶ Outcome Health losing major advertisers following allegations of misleading clients   [Nov-06-17 09:50AM  American City Business Journals]
▶ Ad giant WPP faces stagnant sales this year   [Oct-31-17 05:56AM  Reuters]
▶ McDonalds To Review Its $2 billion Global Media Buying Account   [Oct-26-17 11:44PM  The Wall Street Journal]
▶ Omnicom Group, Inc. Keeps Moving   [Oct-17-17 05:25PM  Motley Fool]
▶ Why Omnicom Group Inc (OMC) Could Be A Buy   [07:31AM  Simply Wall St.]
▶ Omnicom tops Street 3Q forecasts   [06:52AM  Associated Press]
▶ Morgan Stanley Says You Should Be Selling Omnicom   [Oct-16-17 02:48PM  Benzinga]
▶ Omnicom Group Inc. Declares Dividend Increase   [Oct-13-17 04:48PM  PR Newswire]
▶ Omnicom Takes Top Honors at 2017 Spikes Asia Festival   [Oct-02-17 07:00AM  PR Newswire]
▶ John Osborn Named CEO Of OMD US   [03:30PM  PR Newswire]
▶ BBDO Veteran John Osborn Named U.S. CEO of OMD   [01:59PM  The Wall Street Journal]
▶ 52-Week Company Lows   [11:06AM  GuruFocus.com]
▶ World's Leading Companies Failing Authenticity Test   [Sep-12-17 10:30AM  PR Newswire]
▶ Ad Firms Use OpenSlate to Ensure Ads Run With 'Safe' YouTube Videos   [Sep-07-17 11:59AM  The Wall Street Journal]
▶ The Biggest Loser: Omnicom Group Tumbles 7%   [Aug-23-17 05:09PM  Barrons.com]
▶ Porter Novelli Launches China Desk   [12:00PM  PR Newswire]
▶ [$$] Interpublic blames political uncertainty for profit woes   [Jul-25-17 02:11PM  Financial Times]
▶ Omnicom Group Inc. Stays on Track   [Jul-21-17 09:00AM  Motley Fool]
▶ Omnicom tops Street 2Q forecasts   [12:21AM  Associated Press]
▶ What you need to know in advertising today   [12:00PM  Business Insider]
Financial statements of OMC
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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