Intrinsic value of Parker Hannifin - PH

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$157.40

  Intrinsic Value

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  Value-price divergence*

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$157.40

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

We calculate the intrinsic value of PH 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 20.8

 

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, %
  -10.63
  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
  11,361
  11,588
  11,855
  12,159
  12,501
  12,880
  13,296
  13,749
  14,239
  14,767
  15,334
  15,940
  16,587
  17,276
  18,008
  18,785
  19,608
  20,480
  21,401
  22,375
  23,403
  24,488
  25,632
  26,838
  28,108
  29,446
  30,855
  32,338
  33,899
  35,540
  37,267
Variable operating expenses, $m
 
  8,859
  9,056
  9,282
  9,534
  9,815
  10,122
  10,457
  10,820
  11,210
  11,629
  11,787
  12,266
  12,775
  13,316
  13,891
  14,499
  15,144
  15,825
  16,545
  17,305
  18,107
  18,953
  19,845
  20,785
  21,774
  22,816
  23,912
  25,066
  26,280
  27,557
Fixed operating expenses, $m
 
  1,630
  1,670
  1,712
  1,755
  1,799
  1,844
  1,890
  1,937
  1,986
  2,035
  2,086
  2,138
  2,192
  2,247
  2,303
  2,360
  2,419
  2,480
  2,542
  2,605
  2,671
  2,737
  2,806
  2,876
  2,948
  3,021
  3,097
  3,174
  3,254
  3,335
Total operating expenses, $m
  10,246
  10,489
  10,726
  10,994
  11,289
  11,614
  11,966
  12,347
  12,757
  13,196
  13,664
  13,873
  14,404
  14,967
  15,563
  16,194
  16,859
  17,563
  18,305
  19,087
  19,910
  20,778
  21,690
  22,651
  23,661
  24,722
  25,837
  27,009
  28,240
  29,534
  30,892
Operating income, $m
  1,115
  1,099
  1,128
  1,166
  1,212
  1,267
  1,330
  1,402
  1,483
  1,572
  1,670
  2,067
  2,184
  2,310
  2,445
  2,592
  2,749
  2,917
  3,096
  3,288
  3,492
  3,710
  3,941
  4,187
  4,448
  4,725
  5,018
  5,329
  5,658
  6,006
  6,375
EBITDA, $m
  1,422
  1,537
  1,569
  1,610
  1,661
  1,720
  1,789
  1,867
  1,953
  2,049
  2,154
  2,269
  2,394
  2,529
  2,674
  2,830
  2,997
  3,176
  3,368
  3,572
  3,789
  4,020
  4,266
  4,527
  4,804
  5,098
  5,409
  5,739
  6,088
  6,457
  6,848
Interest expense (income), $m
  134
  119
  126
  133
  142
  152
  162
  174
  187
  200
  215
  231
  248
  266
  286
  306
  328
  351
  376
  402
  429
  458
  489
  521
  555
  591
  628
  668
  709
  753
  800
Earnings before tax, $m
  1,115
  980
  1,002
  1,032
  1,070
  1,115
  1,168
  1,228
  1,296
  1,371
  1,454
  1,836
  1,935
  2,043
  2,160
  2,285
  2,420
  2,565
  2,720
  2,886
  3,063
  3,252
  3,452
  3,666
  3,893
  4,134
  4,390
  4,661
  4,948
  5,253
  5,575
Tax expense, $m
  308
  265
  271
  279
  289
  301
  315
  332
  350
  370
  393
  496
  523
  552
  583
  617
  653
  693
  734
  779
  827
  878
  932
  990
  1,051
  1,116
  1,185
  1,258
  1,336
  1,418
  1,505
Net income, $m
  807
  715
  732
  754
  781
  814
  853
  897
  946
  1,001
  1,062
  1,340
  1,413
  1,491
  1,577
  1,668
  1,767
  1,873
  1,986
  2,107
  2,236
  2,374
  2,520
  2,676
  2,842
  3,018
  3,205
  3,403
  3,612
  3,835
  4,070

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,104
  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
  12,034
  10,130
  10,363
  10,629
  10,928
  11,259
  11,623
  12,018
  12,447
  12,909
  13,404
  13,934
  14,499
  15,102
  15,742
  16,421
  17,140
  17,902
  18,707
  19,559
  20,457
  21,405
  22,405
  23,460
  24,570
  25,740
  26,971
  28,268
  29,632
  31,067
  32,576
Adjusted assets (=assets-cash), $m
  9,930
  10,130
  10,363
  10,629
  10,928
  11,259
  11,623
  12,018
  12,447
  12,909
  13,404
  13,934
  14,499
  15,102
  15,742
  16,421
  17,140
  17,902
  18,707
  19,559
  20,457
  21,405
  22,405
  23,460
  24,570
  25,740
  26,971
  28,268
  29,632
  31,067
  32,576
Revenue / Adjusted assets
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
  1.144
Average production assets, $m
  2,584
  2,631
  2,691
  2,760
  2,838
  2,924
  3,018
  3,121
  3,232
  3,352
  3,481
  3,618
  3,765
  3,922
  4,088
  4,264
  4,451
  4,649
  4,858
  5,079
  5,312
  5,559
  5,818
  6,092
  6,381
  6,684
  7,004
  7,341
  7,695
  8,068
  8,460
Working capital, $m
  2,842
  1,124
  1,150
  1,179
  1,213
  1,249
  1,290
  1,334
  1,381
  1,432
  1,487
  1,546
  1,609
  1,676
  1,747
  1,822
  1,902
  1,987
  2,076
  2,170
  2,270
  2,375
  2,486
  2,603
  2,726
  2,856
  2,993
  3,137
  3,288
  3,447
  3,615
Total debt, $m
  3,014
  2,798
  2,964
  3,155
  3,368
  3,605
  3,865
  4,148
  4,455
  4,785
  5,139
  5,518
  5,922
  6,353
  6,810
  7,296
  7,810
  8,355
  8,931
  9,539
  10,182
  10,860
  11,575
  12,329
  13,123
  13,959
  14,840
  15,766
  16,742
  17,768
  18,847
Total liabilities, $m
  7,459
  7,243
  7,409
  7,600
  7,813
  8,050
  8,310
  8,593
  8,900
  9,230
  9,584
  9,963
  10,367
  10,798
  11,255
  11,741
  12,255
  12,800
  13,376
  13,984
  14,627
  15,305
  16,020
  16,774
  17,568
  18,404
  19,285
  20,211
  21,187
  22,213
  23,292
Total equity, $m
  4,575
  2,887
  2,953
  3,029
  3,114
  3,209
  3,312
  3,425
  3,547
  3,679
  3,820
  3,971
  4,132
  4,304
  4,486
  4,680
  4,885
  5,102
  5,332
  5,574
  5,830
  6,101
  6,386
  6,686
  7,002
  7,336
  7,687
  8,056
  8,445
  8,854
  9,284
Total liabilities and equity, $m
  12,034
  10,130
  10,362
  10,629
  10,927
  11,259
  11,622
  12,018
  12,447
  12,909
  13,404
  13,934
  14,499
  15,102
  15,741
  16,421
  17,140
  17,902
  18,708
  19,558
  20,457
  21,406
  22,406
  23,460
  24,570
  25,740
  26,972
  28,267
  29,632
  31,067
  32,576
Debt-to-equity ratio
  0.659
  0.970
  1.000
  1.040
  1.080
  1.120
  1.170
  1.210
  1.260
  1.300
  1.350
  1.390
  1.430
  1.480
  1.520
  1.560
  1.600
  1.640
  1.680
  1.710
  1.750
  1.780
  1.810
  1.840
  1.870
  1.900
  1.930
  1.960
  1.980
  2.010
  2.030
Adjusted equity ratio
  0.249
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  807
  715
  732
  754
  781
  814
  853
  897
  946
  1,001
  1,062
  1,340
  1,413
  1,491
  1,577
  1,668
  1,767
  1,873
  1,986
  2,107
  2,236
  2,374
  2,520
  2,676
  2,842
  3,018
  3,205
  3,403
  3,612
  3,835
  4,070
Depreciation, amort., depletion, $m
  307
  437
  441
  445
  449
  454
  459
  465
  471
  478
  485
  202
  210
  219
  228
  238
  249
  260
  271
  284
  297
  311
  325
  340
  356
  373
  391
  410
  430
  451
  473
Funds from operations, $m
  1,208
  1,153
  1,172
  1,198
  1,230
  1,268
  1,312
  1,361
  1,417
  1,479
  1,546
  1,542
  1,623
  1,711
  1,805
  1,906
  2,016
  2,132
  2,257
  2,391
  2,533
  2,684
  2,845
  3,017
  3,198
  3,391
  3,596
  3,813
  4,042
  4,285
  4,543
Change in working capital, $m
  38
  22
  26
  30
  33
  37
  40
  44
  48
  51
  55
  59
  63
  67
  71
  75
  80
  85
  89
  94
  100
  105
  111
  117
  123
  130
  137
  144
  151
  159
  167
Cash from operations, $m
  1,170
  1,038
  1,146
  1,168
  1,197
  1,231
  1,271
  1,317
  1,369
  1,427
  1,492
  1,484
  1,560
  1,644
  1,734
  1,831
  1,936
  2,048
  2,168
  2,296
  2,433
  2,579
  2,734
  2,900
  3,075
  3,261
  3,459
  3,669
  3,891
  4,126
  4,375
Maintenance CAPEX, $m
  0
  -144
  -147
  -150
  -154
  -159
  -163
  -169
  -174
  -181
  -187
  -194
  -202
  -210
  -219
  -228
  -238
  -249
  -260
  -271
  -284
  -297
  -311
  -325
  -340
  -356
  -373
  -391
  -410
  -430
  -451
New CAPEX, $m
  -149
  -47
  -61
  -69
  -78
  -86
  -94
  -103
  -111
  -120
  -129
  -138
  -147
  -156
  -166
  -176
  -187
  -198
  -209
  -221
  -233
  -246
  -260
  -274
  -288
  -304
  -320
  -337
  -354
  -373
  -392
Cash from investing activities, $m
  -265
  -191
  -208
  -219
  -232
  -245
  -257
  -272
  -285
  -301
  -316
  -332
  -349
  -366
  -385
  -404
  -425
  -447
  -469
  -492
  -517
  -543
  -571
  -599
  -628
  -660
  -693
  -728
  -764
  -803
  -843
Free cash flow, $m
  905
  847
  939
  949
  965
  986
  1,013
  1,046
  1,084
  1,127
  1,176
  1,151
  1,211
  1,277
  1,349
  1,426
  1,511
  1,601
  1,699
  1,804
  1,916
  2,036
  2,164
  2,301
  2,446
  2,601
  2,766
  2,941
  3,127
  3,324
  3,532
Issuance/(repayment) of debt, $m
  86
  146
  167
  190
  214
  237
  260
  283
  306
  330
  354
  379
  404
  431
  458
  486
  515
  545
  576
  609
  643
  678
  715
  754
  794
  836
  881
  927
  975
  1,026
  1,079
Issuance/(repurchase) of shares, $m
  -557
  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  
  -460
  146
  167
  190
  214
  237
  260
  283
  306
  330
  354
  379
  404
  431
  458
  486
  515
  545
  576
  609
  643
  678
  715
  754
  794
  836
  881
  927
  975
  1,026
  1,079
Total cash flow (excl. dividends), $m
  383
  992
  1,105
  1,139
  1,179
  1,223
  1,273
  1,329
  1,390
  1,457
  1,530
  1,530
  1,616
  1,707
  1,806
  1,912
  2,025
  2,146
  2,275
  2,412
  2,559
  2,714
  2,879
  3,054
  3,240
  3,438
  3,646
  3,868
  4,102
  4,350
  4,612
Retained Cash Flow (-), $m
  529
  -54
  -66
  -76
  -85
  -94
  -104
  -113
  -122
  -132
  -141
  -151
  -161
  -172
  -182
  -194
  -205
  -217
  -230
  -243
  -256
  -270
  -285
  -300
  -317
  -333
  -351
  -369
  -389
  -409
  -430
Prev. year cash balance distribution, $m
 
  1,742
  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
 
  2,680
  1,039
  1,063
  1,093
  1,129
  1,170
  1,216
  1,268
  1,325
  1,389
  1,379
  1,454
  1,536
  1,624
  1,718
  1,820
  1,929
  2,045
  2,170
  2,302
  2,444
  2,594
  2,754
  2,924
  3,104
  3,296
  3,498
  3,713
  3,941
  4,182
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
 
  2,570
  951
  926
  900
  875
  849
  822
  792
  761
  728
  655
  621
  584
  545
  504
  462
  420
  377
  334
  293
  253
  215
  181
  149
  121
  96
  75
  57
  43
  31
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

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates in two segments, Diversified Industrial and Aerospace Systems. The Diversified Industrial segment provides pneumatic, fluidic, and electromechanical components and systems; static and dynamic sealing devices; filters, systems, and diagnostics solutions to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors, which control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; and critical flow components for process instrumentation, healthcare, and ultra-high-purity applications, as well as components for use in refrigeration and air conditioning systems, and in fluid control applications for processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment sells its products to original equipment manufacturers and their replacement markets in manufacturing, packaging, processing, transportation, mobile construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, including control actuation systems and components, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inserting systems, hydraulic systems and components, lubrication components, power conditioning and management systems, thermal management, and wheels and brakes. This segment markets its products directly to original equipment manufacturers and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1918 and is headquartered in Cleveland, Ohio.

FINANCIAL RATIOS  of  Parker Hannifin (PH)

Valuation Ratios
P/E Ratio 26.1
Price to Sales 1.9
Price to Book 4.6
Price to Tangible Book
Price to Cash Flow 18
Price to Free Cash Flow 20.7
Growth Rates
Sales Growth Rate -10.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -31%
Cap. Spend. - 3 Yr. Gr. Rate -10.9%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 58%
Total Debt to Equity 65.9%
Interest Coverage 9
Management Effectiveness
Return On Assets 7.4%
Ret/ On Assets - 3 Yr. Avg. 8.1%
Return On Total Capital 10.3%
Ret/ On T. Cap. - 3 Yr. Avg. 11.4%
Return On Equity 16.7%
Return On Equity - 3 Yr. Avg. 16.9%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 23%
Gross Margin - 3 Yr. Avg. 23.5%
EBITDA Margin 13.7%
EBITDA Margin - 3 Yr. Avg. 14.4%
Operating Margin 9.8%
Oper. Margin - 3 Yr. Avg. 11%
Pre-Tax Margin 9.8%
Pre-Tax Margin - 3 Yr. Avg. 11%
Net Profit Margin 7.1%
Net Profit Margin - 3 Yr. Avg. 7.6%
Effective Tax Rate 27.6%
Eff/ Tax Rate - 3 Yr. Avg. 30%
Payout Ratio 42.4%

PH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PH stock intrinsic value calculation we used $11361 million for the last fiscal year's total revenue generated by Parker Hannifin. The default revenue input number comes from 2016 income statement of Parker Hannifin. 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 PH 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 PH is calculated based on our internal credit rating of Parker Hannifin, 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 Parker Hannifin.
    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 PH stock the variable cost ratio is equal to 76.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1590 million in the base year in the intrinsic value calculation for PH 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 4.5% for Parker Hannifin.

Corporate tax rate of 27% is the nominal tax rate for Parker Hannifin. 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 PH 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 PH are equal to 22.7%.

Life of production assets of 17.9 years is the average useful life of capital assets used in Parker Hannifin 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 PH is equal to 9.7%. 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 - $4575 million for Parker Hannifin - 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 132.164 million for Parker Hannifin 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 Parker Hannifin at the current share price and the inputted number of shares is $20.8 billion.


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COMPANY NEWS

▶ Parker-Hannifin beats Street 3Q forecasts   [07:58AM  Associated Press]
▶ Parker Declares Quarterly Cash Dividend   [Apr-20-17 05:40PM  GlobeNewswire]
▶ Cramer: We Have Nothing to Distinguish the Stocks Right Now   [Apr-03-17 07:01PM  TheStreet.com]
▶ New Breakout Stocks Zacks Rank #1 (Strong Buy)   [Apr-01-17 12:12PM  Zacks]
▶ Bull of the Day: Parker Hannifin (PH)   [Mar-31-17 10:53AM  Zacks]
▶ Did Rockwell Automation Really Just Have a Lucky Quarter?   [Mar-28-17 12:47PM  at Motley Fool]
▶ Parker Hannifin Celebrates 100 Years   [07:30AM  GlobeNewswire]
Stock chart of PH Financial statements of PH Annual reports of PH
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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