Intrinsic value of PPL - PPL

Previous Close

$39.05

  Intrinsic Value

$24.43

stock screener

  Rating & Target

sell

-37%

  Value-price divergence*

+6%

Previous close

$39.05

 
Intrinsic value

$24.43

 
Up/down potential

-37%

 
Rating

sell

 
Value-price divergence*

+6%

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

We calculate the intrinsic value of PPL 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 26.8

 

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, %
  -1.98
  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
  7,667
  7,844
  8,045
  8,272
  8,522
  8,798
  9,097
  9,421
  9,771
  10,146
  10,547
  10,975
  11,431
  11,915
  12,429
  12,974
  13,550
  14,160
  14,804
  15,485
  16,202
  16,959
  17,757
  18,598
  19,483
  20,415
  21,397
  22,429
  23,515
  24,658
Variable operating expenses, $m
 
  4,832
  4,936
  5,055
  5,189
  5,337
  5,499
  5,676
  5,867
  6,074
  6,295
  6,226
  6,478
  6,748
  7,033
  7,337
  7,658
  7,999
  8,359
  8,739
  9,140
  9,564
  10,011
  10,482
  10,978
  11,501
  12,051
  12,630
  13,240
  13,881
  14,555
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
  4,469
  4,832
  4,936
  5,055
  5,189
  5,337
  5,499
  5,676
  5,867
  6,074
  6,295
  6,226
  6,478
  6,748
  7,033
  7,337
  7,658
  7,999
  8,359
  8,739
  9,140
  9,564
  10,011
  10,482
  10,978
  11,501
  12,051
  12,630
  13,240
  13,881
  14,555
Operating income, $m
  3,048
  2,835
  2,908
  2,990
  3,083
  3,186
  3,298
  3,421
  3,554
  3,697
  3,851
  4,321
  4,497
  4,683
  4,882
  5,092
  5,315
  5,552
  5,802
  6,065
  6,344
  6,638
  6,948
  7,275
  7,620
  7,982
  8,364
  8,766
  9,189
  9,634
  10,103
EBITDA, $m
  4,054
  3,337
  3,414
  3,501
  3,600
  3,709
  3,829
  3,959
  4,100
  4,252
  4,416
  4,590
  4,776
  4,975
  5,186
  5,409
  5,646
  5,897
  6,163
  6,443
  6,739
  7,051
  7,381
  7,728
  8,094
  8,479
  8,885
  9,312
  9,761
  10,234
  10,731
Interest expense (income), $m
  854
  832
  856
  885
  918
  955
  996
  1,041
  1,091
  1,144
  1,201
  1,263
  1,329
  1,399
  1,474
  1,553
  1,638
  1,727
  1,822
  1,922
  2,028
  2,140
  2,257
  2,382
  2,513
  2,651
  2,796
  2,949
  3,110
  3,280
  3,458
Earnings before tax, $m
  2,550
  2,003
  2,052
  2,105
  2,165
  2,231
  2,302
  2,380
  2,463
  2,553
  2,650
  3,058
  3,168
  3,284
  3,408
  3,539
  3,678
  3,824
  3,980
  4,143
  4,316
  4,499
  4,691
  4,893
  5,107
  5,332
  5,568
  5,817
  6,079
  6,354
  6,644
Tax expense, $m
  648
  541
  554
  568
  585
  602
  622
  643
  665
  689
  715
  826
  855
  887
  920
  956
  993
  1,033
  1,074
  1,119
  1,165
  1,215
  1,267
  1,321
  1,379
  1,440
  1,503
  1,571
  1,641
  1,716
  1,794
Net income, $m
  1,902
  1,462
  1,498
  1,537
  1,580
  1,628
  1,681
  1,737
  1,798
  1,864
  1,934
  2,233
  2,313
  2,398
  2,488
  2,583
  2,685
  2,792
  2,905
  3,025
  3,151
  3,284
  3,424
  3,572
  3,728
  3,892
  4,065
  4,246
  4,438
  4,639
  4,850

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  341
  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
  38,315
  38,724
  39,615
  40,633
  41,776
  43,042
  44,432
  45,945
  47,583
  49,348
  51,242
  53,268
  55,429
  57,731
  60,178
  62,774
  65,524
  68,436
  71,516
  74,770
  78,205
  81,830
  85,653
  89,683
  93,928
  98,400
  103,108
  108,064
  113,278
  118,764
  124,535
Adjusted assets (=assets-cash), $m
  37,974
  38,724
  39,615
  40,633
  41,776
  43,042
  44,432
  45,945
  47,583
  49,348
  51,242
  53,268
  55,429
  57,731
  60,178
  62,774
  65,524
  68,436
  71,516
  74,770
  78,205
  81,830
  85,653
  89,683
  93,928
  98,400
  103,108
  108,064
  113,278
  118,764
  124,535
Revenue / Adjusted assets
  0.000
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
Average production assets, $m
  1,914
  1,955
  2,000
  2,052
  2,109
  2,173
  2,243
  2,320
  2,402
  2,492
  2,587
  2,689
  2,799
  2,915
  3,038
  3,169
  3,308
  3,455
  3,611
  3,775
  3,949
  4,132
  4,325
  4,528
  4,742
  4,968
  5,206
  5,456
  5,719
  5,996
  6,288
Working capital, $m
  -1,770
  -682
  -698
  -716
  -736
  -758
  -783
  -810
  -839
  -870
  -903
  -939
  -977
  -1,017
  -1,060
  -1,106
  -1,155
  -1,206
  -1,260
  -1,318
  -1,378
  -1,442
  -1,509
  -1,580
  -1,655
  -1,734
  -1,817
  -1,904
  -1,996
  -2,093
  -2,195
Total debt, $m
  19,249
  19,450
  20,108
  20,861
  21,705
  22,641
  23,668
  24,786
  25,997
  27,301
  28,700
  30,198
  31,795
  33,496
  35,304
  37,223
  39,256
  41,408
  43,683
  46,088
  48,627
  51,305
  54,131
  57,108
  60,246
  63,551
  67,030
  70,692
  74,546
  78,600
  82,864
Total liabilities, $m
  28,416
  28,617
  29,275
  30,028
  30,872
  31,808
  32,835
  33,953
  35,164
  36,468
  37,867
  39,365
  40,962
  42,663
  44,471
  46,390
  48,423
  50,575
  52,850
  55,255
  57,794
  60,472
  63,298
  66,275
  69,413
  72,718
  76,197
  79,859
  83,713
  87,767
  92,031
Total equity, $m
  9,899
  10,107
  10,339
  10,605
  10,903
  11,234
  11,597
  11,992
  12,419
  12,880
  13,374
  13,903
  14,467
  15,068
  15,706
  16,384
  17,102
  17,862
  18,666
  19,515
  20,412
  21,358
  22,355
  23,407
  24,515
  25,682
  26,911
  28,205
  29,566
  30,997
  32,504
Total liabilities and equity, $m
  38,315
  38,724
  39,614
  40,633
  41,775
  43,042
  44,432
  45,945
  47,583
  49,348
  51,241
  53,268
  55,429
  57,731
  60,177
  62,774
  65,525
  68,437
  71,516
  74,770
  78,206
  81,830
  85,653
  89,682
  93,928
  98,400
  103,108
  108,064
  113,279
  118,764
  124,535
Debt-to-equity ratio
  1.945
  1.920
  1.940
  1.970
  1.990
  2.020
  2.040
  2.070
  2.090
  2.120
  2.150
  2.170
  2.200
  2.220
  2.250
  2.270
  2.300
  2.320
  2.340
  2.360
  2.380
  2.400
  2.420
  2.440
  2.460
  2.470
  2.490
  2.510
  2.520
  2.540
  2.550
Adjusted equity ratio
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261
  0.261

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,902
  1,462
  1,498
  1,537
  1,580
  1,628
  1,681
  1,737
  1,798
  1,864
  1,934
  2,233
  2,313
  2,398
  2,488
  2,583
  2,685
  2,792
  2,905
  3,025
  3,151
  3,284
  3,424
  3,572
  3,728
  3,892
  4,065
  4,246
  4,438
  4,639
  4,850
Depreciation, amort., depletion, $m
  1,006
  502
  506
  511
  517
  523
  530
  538
  546
  555
  565
  269
  280
  291
  304
  317
  331
  346
  361
  378
  395
  413
  432
  453
  474
  497
  521
  546
  572
  600
  629
Funds from operations, $m
  2,317
  1,964
  2,004
  2,048
  2,097
  2,152
  2,211
  2,275
  2,345
  2,419
  2,499
  2,502
  2,592
  2,689
  2,792
  2,900
  3,016
  3,137
  3,266
  3,402
  3,546
  3,697
  3,857
  4,025
  4,202
  4,389
  4,585
  4,792
  5,010
  5,238
  5,479
Change in working capital, $m
  -573
  -13
  -16
  -18
  -20
  -22
  -24
  -27
  -29
  -31
  -33
  -36
  -38
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -92
  -97
  -102
Cash from operations, $m
  2,890
  1,977
  2,020
  2,066
  2,118
  2,174
  2,235
  2,302
  2,373
  2,450
  2,532
  2,537
  2,630
  2,730
  2,835
  2,946
  3,064
  3,189
  3,320
  3,460
  3,606
  3,761
  3,924
  4,096
  4,277
  4,468
  4,668
  4,879
  5,101
  5,335
  5,581
Maintenance CAPEX, $m
  0
  -191
  -196
  -200
  -205
  -211
  -217
  -224
  -232
  -240
  -249
  -259
  -269
  -280
  -291
  -304
  -317
  -331
  -346
  -361
  -378
  -395
  -413
  -432
  -453
  -474
  -497
  -521
  -546
  -572
  -600
New CAPEX, $m
  -2,957
  -41
  -45
  -51
  -58
  -64
  -70
  -76
  -83
  -89
  -96
  -102
  -109
  -116
  -124
  -131
  -139
  -147
  -155
  -164
  -173
  -183
  -193
  -203
  -214
  -226
  -238
  -250
  -263
  -277
  -291
Cash from investing activities, $m
  -2,918
  -232
  -241
  -251
  -263
  -275
  -287
  -300
  -315
  -329
  -345
  -361
  -378
  -396
  -415
  -435
  -456
  -478
  -501
  -525
  -551
  -578
  -606
  -635
  -667
  -700
  -735
  -771
  -809
  -849
  -891
Free cash flow, $m
  -28
  1,745
  1,779
  1,815
  1,855
  1,899
  1,948
  2,001
  2,059
  2,121
  2,188
  2,176
  2,252
  2,333
  2,420
  2,511
  2,608
  2,711
  2,819
  2,934
  3,055
  3,183
  3,318
  3,460
  3,610
  3,768
  3,934
  4,109
  4,293
  4,486
  4,690
Issuance/(repayment) of debt, $m
  441
  542
  658
  752
  845
  936
  1,027
  1,118
  1,210
  1,304
  1,400
  1,497
  1,598
  1,701
  1,808
  1,918
  2,033
  2,152
  2,276
  2,405
  2,539
  2,679
  2,825
  2,978
  3,138
  3,305
  3,479
  3,662
  3,854
  4,054
  4,264
Issuance/(repurchase) of shares, $m
  144
  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  
  591
  542
  658
  752
  845
  936
  1,027
  1,118
  1,210
  1,304
  1,400
  1,497
  1,598
  1,701
  1,808
  1,918
  2,033
  2,152
  2,276
  2,405
  2,539
  2,679
  2,825
  2,978
  3,138
  3,305
  3,479
  3,662
  3,854
  4,054
  4,264
Total cash flow (excl. dividends), $m
  535
  2,287
  2,437
  2,567
  2,699
  2,835
  2,975
  3,119
  3,269
  3,425
  3,587
  3,674
  3,850
  4,035
  4,228
  4,430
  4,641
  4,863
  5,095
  5,339
  5,594
  5,862
  6,143
  6,438
  6,747
  7,072
  7,413
  7,771
  8,146
  8,540
  8,954
Retained Cash Flow (-), $m
  20
  -208
  -232
  -266
  -298
  -331
  -363
  -395
  -428
  -461
  -494
  -529
  -564
  -601
  -638
  -678
  -718
  -760
  -804
  -849
  -897
  -946
  -998
  -1,052
  -1,108
  -1,167
  -1,229
  -1,293
  -1,361
  -1,432
  -1,506
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
 
  2,079
  2,205
  2,301
  2,401
  2,505
  2,612
  2,724
  2,842
  2,964
  3,093
  3,145
  3,286
  3,434
  3,589
  3,752
  3,923
  4,103
  4,291
  4,489
  4,697
  4,916
  5,145
  5,386
  5,639
  5,905
  6,184
  6,477
  6,785
  7,108
  7,448
Discount rate, %
 
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
 
  1,899
  1,823
  1,707
  1,582
  1,450
  1,315
  1,178
  1,042
  909
  782
  646
  540
  443
  357
  283
  219
  167
  124
  90
  64
  44
  29
  19
  12
  7
  4
  3
  1
  1
  0
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

PPL Corporation, a utility company, delivers electricity and natural gas in the United States and the United Kingdom. The company operates in three segments: U.K. Regulated, Kentucky Regulated, and Pennsylvania Regulated. It serves 324,000 natural gas and 407,000 electric customers in Louisville and adjacent areas in Kentucky; 521,000 customers in central, southeastern, and western Kentucky; and approximately 28,000 customers in 5 counties in southwestern Virginia, and 4 customers in Tennessee. The company also provides electric delivery services to approximately 1.4 million customers in Pennsylvania; and operates 15 electricity distribution networks in the United Kingdom, as well as delivers natural gas to customers in Kentucky; generates electricity from power plants in Kentucky; and sells wholesale electricity to 11 municipalities in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.

FINANCIAL RATIOS  of  PPL (PPL)

Valuation Ratios
P/E Ratio 14
Price to Sales 3.5
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow -396.2
Growth Rates
Sales Growth Rate -2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -17.2%
Cap. Spend. - 3 Yr. Gr. Rate -4.3%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 179.9%
Total Debt to Equity 194.5%
Interest Coverage 4
Management Effectiveness
Return On Assets 6.5%
Ret/ On Assets - 3 Yr. Avg. 4.9%
Return On Total Capital 6.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.6%
Return On Equity 19.2%
Return On Equity - 3 Yr. Avg. 12.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 58.7%
EBITDA Margin - 3 Yr. Avg. 53.5%
Operating Margin 40.5%
Oper. Margin - 3 Yr. Avg. 38%
Pre-Tax Margin 33.9%
Pre-Tax Margin - 3 Yr. Avg. 29.3%
Net Profit Margin 25.3%
Net Profit Margin - 3 Yr. Avg. 18.8%
Effective Tax Rate 25.4%
Eff/ Tax Rate - 3 Yr. Avg. 26.8%
Payout Ratio 54.2%

PPL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PPL stock intrinsic value calculation we used $7517 million for the last fiscal year's total revenue generated by PPL. The default revenue input number comes from 2016 income statement of PPL. 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 PPL 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 9.5%, whose default value for PPL is calculated based on our internal credit rating of PPL, 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 PPL.
    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 PPL stock the variable cost ratio is equal to 63.1%.

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 PPL 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 4.4% for PPL.

Corporate tax rate of 27% is the nominal tax rate for PPL. 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 PPL 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 PPL are equal to 25.5%.

Life of production assets of 10 years is the average useful life of capital assets used in PPL 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 PPL is equal to -8.9%. 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 - $9899 million for PPL - 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 685.271 million for PPL 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 PPL at the current share price and the inputted number of shares is $26.8 billion.

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ED Consolidated E 83.44 49.92  sell

COMPANY NEWS

▶ PPL Corp. Value Analysis (NYSE:PPL) : August 17, 2017   [Aug-16-17 10:01PM  Capital Cube]
▶ [$$] 2 Utilities to Help Protect Your Portfolio   [Aug-07-17 04:48PM  Barrons.com]
▶ PPL beats 2Q profit forecasts   [Aug-03-17 07:42PM  Associated Press]
▶ A Look at PPLs Price Targets and Analyst Recommendations   [Aug-01-17 10:38AM  Market Realist]
▶ Comparing PPLs Dividend Yield to Its Peers   [07:39AM  Market Realist]
▶ Key Factors behind PPLs Stock Outperformance in 2017   [Jul-31-17 02:05PM  Market Realist]
▶ How Analysts View PPL Stock   [Jun-30-17 10:37AM  Market Realist]
▶ Analyzing Institutional Ownership in PPL   [09:07AM  Market Realist]
▶ Whats PPLs Implied Volatility?   [07:37AM  Market Realist]
▶ How PPL Stock Is Currently Valued Compared to Peers   [Jun-29-17 06:05PM  Market Realist]
▶ Wheres PPL Stock Headed?   [04:35PM  Market Realist]
▶ Why PPL Could Gain Strength   [02:48PM  Market Realist]
▶ PPL Corp. Value Analysis (NYSE:PPL) : June 27, 2017   [Jun-27-17 04:44PM  Capital Cube]
▶ Looking to propose a shareholder vote? It may get tougher   [Jun-06-17 06:57PM  Associated Press]
▶ ETFs with exposure to PPL Corp. : May 30, 2017   [May-30-17 12:39PM  Capital Cube]
▶ PPL to Pay Quarterly Stock Dividend July 3   [May-17-17 11:38AM  PR Newswire]
▶ ETFs with exposure to PPL Corp. : May 9, 2017   [May-09-17 04:58PM  Capital Cube]
▶ PPL meets 1Q profit forecasts   [07:21AM  Associated Press]
▶ NRG Energys Implied Volatility Is Rising   [12:35PM  Market Realist]
▶ What Analysts Recommend for PPL   [Apr-21-17 10:36AM  Market Realist]
▶ What Does PPLs Implied Volatility Suggest?   [09:06AM  Market Realist]
▶ What Does PPLs Current Valuation Indicate?   [07:36AM  Market Realist]
▶ These Factors Could Drive PPLs 1Q17 Earnings   [12:05PM  Market Realist]
▶ Why PPL Stock Could Go Higher from Here   [10:38AM  Market Realist]
▶ Opening Bell, April 19, 2017   [Apr-19-17 09:30AM  CNBC Videos]
▶ Today's Bell Ringer, April 19, 2017   [09:15AM  CNBC Videos]
▶ Analysts Views on PPL Corporation and Its Price Targets   [Apr-04-17 02:05PM  Market Realist]
▶ Whats PPL Corporations Implied Volatility?   [12:35PM  Market Realist]
▶ PPLs Valuation Compared to Utility Giants   [11:03AM  Market Realist]
▶ What to Expect from PPL Corporation in 2017   [11:03AM  Market Realist]
▶ Analysts Are the Most Bearish on These Utility Stocks   [Apr-03-17 05:35PM  Market Realist]
▶ Why These Utility Stocks Should Concern You   [Mar-29-17 02:35PM  Market Realist]
▶ Hate Checking Your Portfolio? Try These 3 Stocks   [Mar-18-17 08:06AM  at Motley Fool]
▶ PPL Electric Utilities getting ready for storm   [Mar-13-17 10:28AM  PR Newswire]
Stock chart of PPL Financial statements of PPL
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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