Intrinsic value of Praxair - PX

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$132.80

  Intrinsic Value

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  Value-price divergence*

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

We calculate the intrinsic value of PX 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 38.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -2.25
  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
  10,534
  10,745
  10,992
  11,274
  11,591
  11,943
  12,328
  12,748
  13,203
  13,692
  14,218
  14,780
  15,380
  16,019
  16,697
  17,418
  18,181
  18,989
  19,843
  20,746
  21,699
  22,705
  23,766
  24,884
  26,062
  27,303
  28,609
  29,984
  31,431
  32,953
  34,554
Variable operating expenses, $m
 
  7,053
  7,208
  7,385
  7,584
  7,805
  8,047
  8,310
  8,595
  8,902
  9,232
  9,273
  9,650
  10,050
  10,476
  10,928
  11,407
  11,914
  12,450
  13,016
  13,614
  14,246
  14,911
  15,613
  16,352
  17,130
  17,950
  18,812
  19,720
  20,675
  21,680
Fixed operating expenses, $m
 
  1,444
  1,480
  1,517
  1,555
  1,594
  1,634
  1,675
  1,717
  1,760
  1,804
  1,849
  1,895
  1,942
  1,991
  2,041
  2,092
  2,144
  2,198
  2,252
  2,309
  2,367
  2,426
  2,486
  2,548
  2,612
  2,678
  2,744
  2,813
  2,883
  2,955
Total operating expenses, $m
  8,296
  8,497
  8,688
  8,902
  9,139
  9,399
  9,681
  9,985
  10,312
  10,662
  11,036
  11,122
  11,545
  11,992
  12,467
  12,969
  13,499
  14,058
  14,648
  15,268
  15,923
  16,613
  17,337
  18,099
  18,900
  19,742
  20,628
  21,556
  22,533
  23,558
  24,635
Operating income, $m
  2,238
  2,247
  2,303
  2,372
  2,452
  2,544
  2,648
  2,763
  2,891
  3,030
  3,182
  3,658
  3,835
  4,026
  4,230
  4,449
  4,682
  4,931
  5,196
  5,477
  5,776
  6,093
  6,429
  6,785
  7,162
  7,561
  7,982
  8,427
  8,898
  9,395
  9,919
EBITDA, $m
  3,360
  3,325
  3,398
  3,486
  3,589
  3,706
  3,838
  3,983
  4,143
  4,317
  4,507
  4,711
  4,931
  5,167
  5,420
  5,690
  5,977
  6,284
  6,609
  6,955
  7,322
  7,711
  8,122
  8,558
  9,019
  9,505
  10,020
  10,563
  11,137
  11,742
  12,381
Interest expense (income), $m
  189
  315
  324
  336
  349
  363
  379
  397
  416
  437
  459
  483
  509
  537
  566
  597
  630
  665
  702
  741
  783
  826
  872
  921
  972
  1,026
  1,083
  1,143
  1,206
  1,272
  1,342
Earnings before tax, $m
  2,048
  1,933
  1,979
  2,036
  2,103
  2,181
  2,268
  2,366
  2,475
  2,593
  2,723
  3,175
  3,326
  3,489
  3,664
  3,852
  4,052
  4,266
  4,494
  4,736
  4,994
  5,267
  5,557
  5,864
  6,190
  6,534
  6,899
  7,285
  7,692
  8,123
  8,577
Tax expense, $m
  551
  522
  534
  550
  568
  589
  612
  639
  668
  700
  735
  857
  898
  942
  989
  1,040
  1,094
  1,152
  1,213
  1,279
  1,348
  1,422
  1,500
  1,583
  1,671
  1,764
  1,863
  1,967
  2,077
  2,193
  2,316
Net income, $m
  1,500
  1,411
  1,445
  1,486
  1,535
  1,592
  1,656
  1,727
  1,806
  1,893
  1,988
  2,318
  2,428
  2,547
  2,675
  2,812
  2,958
  3,114
  3,280
  3,457
  3,645
  3,845
  4,057
  4,281
  4,519
  4,770
  5,036
  5,318
  5,615
  5,930
  6,261

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  524
  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
  19,332
  19,187
  19,628
  20,133
  20,699
  21,327
  22,015
  22,765
  23,576
  24,451
  25,389
  26,393
  27,464
  28,605
  29,817
  31,103
  32,466
  33,909
  35,435
  37,047
  38,749
  40,545
  42,439
  44,436
  46,540
  48,755
  51,088
  53,543
  56,127
  58,845
  61,704
Adjusted assets (=assets-cash), $m
  18,808
  19,187
  19,628
  20,133
  20,699
  21,327
  22,015
  22,765
  23,576
  24,451
  25,389
  26,393
  27,464
  28,605
  29,817
  31,103
  32,466
  33,909
  35,435
  37,047
  38,749
  40,545
  42,439
  44,436
  46,540
  48,755
  51,088
  53,543
  56,127
  58,845
  61,704
Revenue / Adjusted assets
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
Average production assets, $m
  11,813
  6,200
  6,342
  6,505
  6,688
  6,891
  7,114
  7,356
  7,618
  7,901
  8,204
  8,528
  8,874
  9,243
  9,634
  10,050
  10,490
  10,957
  11,450
  11,971
  12,521
  13,101
  13,713
  14,358
  15,038
  15,754
  16,508
  17,301
  18,136
  19,014
  19,938
Working capital, $m
  402
  484
  495
  507
  522
  537
  555
  574
  594
  616
  640
  665
  692
  721
  751
  784
  818
  855
  893
  934
  976
  1,022
  1,069
  1,120
  1,173
  1,229
  1,287
  1,349
  1,414
  1,483
  1,555
Total debt, $m
  9,515
  9,268
  9,591
  9,961
  10,376
  10,836
  11,341
  11,891
  12,486
  13,126
  13,814
  14,550
  15,335
  16,171
  17,060
  18,003
  19,002
  20,059
  21,178
  22,359
  23,607
  24,924
  26,312
  27,776
  29,318
  30,942
  32,651
  34,451
  36,345
  38,338
  40,433
Total liabilities, $m
  14,311
  14,064
  14,387
  14,757
  15,172
  15,632
  16,137
  16,687
  17,282
  17,922
  18,610
  19,346
  20,131
  20,967
  21,856
  22,799
  23,798
  24,855
  25,974
  27,155
  28,403
  29,720
  31,108
  32,572
  34,114
  35,738
  37,447
  39,247
  41,141
  43,134
  45,229
Total equity, $m
  5,021
  5,123
  5,241
  5,375
  5,527
  5,694
  5,878
  6,078
  6,295
  6,528
  6,779
  7,047
  7,333
  7,637
  7,961
  8,305
  8,668
  9,054
  9,461
  9,892
  10,346
  10,826
  11,331
  11,864
  12,426
  13,018
  13,640
  14,296
  14,986
  15,712
  16,475
Total liabilities and equity, $m
  19,332
  19,187
  19,628
  20,132
  20,699
  21,326
  22,015
  22,765
  23,577
  24,450
  25,389
  26,393
  27,464
  28,604
  29,817
  31,104
  32,466
  33,909
  35,435
  37,047
  38,749
  40,546
  42,439
  44,436
  46,540
  48,756
  51,087
  53,543
  56,127
  58,846
  61,704
Debt-to-equity ratio
  1.895
  1.810
  1.830
  1.850
  1.880
  1.900
  1.930
  1.960
  1.980
  2.010
  2.040
  2.060
  2.090
  2.120
  2.140
  2.170
  2.190
  2.220
  2.240
  2.260
  2.280
  2.300
  2.320
  2.340
  2.360
  2.380
  2.390
  2.410
  2.430
  2.440
  2.450
Adjusted equity ratio
  0.262
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,500
  1,411
  1,445
  1,486
  1,535
  1,592
  1,656
  1,727
  1,806
  1,893
  1,988
  2,318
  2,428
  2,547
  2,675
  2,812
  2,958
  3,114
  3,280
  3,457
  3,645
  3,845
  4,057
  4,281
  4,519
  4,770
  5,036
  5,318
  5,615
  5,930
  6,261
Depreciation, amort., depletion, $m
  1,122
  1,077
  1,095
  1,115
  1,137
  1,162
  1,190
  1,220
  1,252
  1,287
  1,325
  1,053
  1,096
  1,141
  1,189
  1,241
  1,295
  1,353
  1,414
  1,478
  1,546
  1,617
  1,693
  1,773
  1,857
  1,945
  2,038
  2,136
  2,239
  2,347
  2,461
Funds from operations, $m
  2,820
  2,488
  2,539
  2,601
  2,673
  2,754
  2,846
  2,947
  3,059
  3,180
  3,312
  3,370
  3,524
  3,688
  3,864
  4,053
  4,253
  4,467
  4,694
  4,935
  5,191
  5,462
  5,750
  6,054
  6,375
  6,715
  7,074
  7,454
  7,854
  8,277
  8,723
Change in working capital, $m
  47
  9
  11
  13
  14
  16
  17
  19
  20
  22
  24
  25
  27
  29
  31
  32
  34
  36
  38
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  68
  72
Cash from operations, $m
  2,773
  -3,013
  2,528
  2,588
  2,659
  2,739
  2,829
  2,928
  3,038
  3,158
  3,288
  3,345
  3,497
  3,660
  3,834
  4,020
  4,219
  4,431
  4,656
  4,895
  5,148
  5,417
  5,702
  6,003
  6,322
  6,659
  7,015
  7,392
  7,789
  8,208
  8,651
Maintenance CAPEX, $m
  0
  -750
  -765
  -783
  -803
  -826
  -851
  -878
  -908
  -940
  -975
  -1,013
  -1,053
  -1,096
  -1,141
  -1,189
  -1,241
  -1,295
  -1,353
  -1,414
  -1,478
  -1,546
  -1,617
  -1,693
  -1,773
  -1,857
  -1,945
  -2,038
  -2,136
  -2,239
  -2,347
New CAPEX, $m
  -1,465
  -125
  -143
  -163
  -183
  -203
  -222
  -242
  -262
  -283
  -303
  -324
  -346
  -369
  -392
  -416
  -440
  -466
  -493
  -521
  -550
  -580
  -612
  -645
  -680
  -716
  -754
  -793
  -835
  -878
  -924
Cash from investing activities, $m
  -1,770
  -875
  -908
  -946
  -986
  -1,029
  -1,073
  -1,120
  -1,170
  -1,223
  -1,278
  -1,337
  -1,399
  -1,465
  -1,533
  -1,605
  -1,681
  -1,761
  -1,846
  -1,935
  -2,028
  -2,126
  -2,229
  -2,338
  -2,453
  -2,573
  -2,699
  -2,831
  -2,971
  -3,117
  -3,271
Free cash flow, $m
  1,003
  -3,888
  1,620
  1,642
  1,672
  1,710
  1,755
  1,808
  1,868
  1,935
  2,010
  2,008
  2,098
  2,195
  2,301
  2,415
  2,538
  2,669
  2,810
  2,960
  3,120
  3,291
  3,472
  3,665
  3,870
  4,087
  4,317
  4,560
  4,818
  5,091
  5,380
Issuance/(repayment) of debt, $m
  357
  277
  323
  370
  415
  460
  505
  550
  595
  641
  688
  736
  785
  836
  888
  943
  999
  1,058
  1,118
  1,182
  1,248
  1,317
  1,388
  1,463
  1,542
  1,624
  1,710
  1,800
  1,894
  1,992
  2,096
Issuance/(repurchase) of shares, $m
  -89
  3,713
  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  
  213
  3,990
  323
  370
  415
  460
  505
  550
  595
  641
  688
  736
  785
  836
  888
  943
  999
  1,058
  1,118
  1,182
  1,248
  1,317
  1,388
  1,463
  1,542
  1,624
  1,710
  1,800
  1,894
  1,992
  2,096
Total cash flow (excl. dividends), $m
  1,233
  -3,611
  1,944
  2,012
  2,088
  2,170
  2,260
  2,357
  2,463
  2,576
  2,698
  2,744
  2,883
  3,031
  3,190
  3,358
  3,537
  3,727
  3,928
  4,142
  4,368
  4,607
  4,861
  5,129
  5,412
  5,711
  6,027
  6,360
  6,712
  7,084
  7,475
Retained Cash Flow (-), $m
  -632
  -102
  -118
  -135
  -151
  -168
  -184
  -200
  -217
  -233
  -251
  -268
  -286
  -305
  -324
  -343
  -364
  -385
  -407
  -430
  -454
  -480
  -506
  -533
  -562
  -592
  -623
  -656
  -690
  -726
  -763
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
 
  0
  1,826
  1,877
  1,936
  2,003
  2,076
  2,157
  2,246
  2,343
  2,447
  2,476
  2,597
  2,727
  2,866
  3,015
  3,173
  3,342
  3,521
  3,711
  3,914
  4,128
  4,355
  4,596
  4,850
  5,119
  5,404
  5,705
  6,022
  6,358
  6,712
Discount rate, %
 
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
 
  0
  1,551
  1,453
  1,353
  1,252
  1,151
  1,049
  947
  847
  749
  633
  547
  467
  392
  324
  263
  210
  164
  126
  94
  69
  50
  35
  23
  15
  10
  6
  4
  2
  1
Current shareholders' claim on cash, %
  100
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1
  91.1

Praxair, Inc. produces, sells, and distributes atmospheric, process, and specialty gases, as well as surface coatings in North America, Europe, South America, and Asia. The company offers atmospheric gases, such as oxygen, nitrogen, argon, and rare gases; and process gases comprising carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. It also designs, engineers, and builds equipment that produces industrial gases; and manufactures precious metal and ceramic sputtering targets used primarily in the production of semiconductors. In addition, the company supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders to the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. Further, it provides electric arc, plasma and wire spray, and high-velocity oxy-fuel equipment; and distributes hardgoods and welding equipment purchased from independent manufacturers. The company sells its products primarily through independent distributors. It serves various industries, such as healthcare, petroleum refining, manufacturing, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment. Praxair, Inc. was founded in 1907 and is headquartered in Danbury, Connecticut.

FINANCIAL RATIOS  of  Praxair (PX)

Valuation Ratios
P/E Ratio 25.2
Price to Sales 3.6
Price to Book 7.5
Price to Tangible Book
Price to Cash Flow 13.6
Price to Free Cash Flow 28.9
Growth Rates
Sales Growth Rate -2.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.9%
Cap. Spend. - 3 Yr. Gr. Rate -6.2%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 177.6%
Total Debt to Equity 189.5%
Interest Coverage 12
Management Effectiveness
Return On Assets 8.7%
Ret/ On Assets - 3 Yr. Avg. 8.9%
Return On Total Capital 10.7%
Ret/ On T. Cap. - 3 Yr. Avg. 10.9%
Return On Equity 31.9%
Return On Equity - 3 Yr. Avg. 30.2%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 44.4%
Gross Margin - 3 Yr. Avg. 44.1%
EBITDA Margin 31.9%
EBITDA Margin - 3 Yr. Avg. 31.5%
Operating Margin 21.2%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 19.4%
Pre-Tax Margin - 3 Yr. Avg. 19.7%
Net Profit Margin 14.2%
Net Profit Margin - 3 Yr. Avg. 14.1%
Effective Tax Rate 26.9%
Eff/ Tax Rate - 3 Yr. Avg. 28%
Payout Ratio 57.1%

PX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PX stock intrinsic value calculation we used $10534 million for the last fiscal year's total revenue generated by Praxair. The default revenue input number comes from 2016 income statement of Praxair. 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 PX 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 8.1%, whose default value for PX is calculated based on our internal credit rating of Praxair, 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 Praxair.
    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 PX stock the variable cost ratio is equal to 65.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1409 million in the base year in the intrinsic value calculation for PX 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 3.5% for Praxair.

Corporate tax rate of 27% is the nominal tax rate for Praxair. 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 PX 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 PX are equal to 57.7%.

Life of production assets of 8.1 years is the average useful life of capital assets used in Praxair 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 PX is equal to 4.5%. 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 - $5021 million for Praxair - 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 285.809 million for Praxair 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 Praxair at the current share price and the inputted number of shares is $38.0 billion.


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COMPANY NEWS

▶ Linde to terminate ADRs due to Praxair merger   [Jun-23-17 08:20AM  Reuters]
▶ ETFs with exposure to Praxair, Inc. : June 22, 2017   [Jun-22-17 04:17PM  Capital Cube]
▶ Why APDs Latest Valuations Matter   [09:06AM  Market Realist]
▶ APD to Pay Its Third Dividend This Year   [09:09AM  Market Realist]
▶ DuPont-DOW Merger Clears One More Hurdle   [Jun-19-17 08:31AM  Market Realist]
▶ Praxair: Cramer's Top Takeaways   [Jun-17-17 06:41AM  TheStreet.com]
▶ THE DAY AHEAD-North America, June 2   [Jun-01-17 05:46PM  Reuters]
▶ [$$] Linde, Praxair Boards Approve Merger   [04:20PM  The Wall Street Journal]
▶ Linde and Praxair Sign Accord   [01:43PM  TheStreet.com]
▶ Inside Praxair: The Latest Valuations   [09:08AM  Market Realist]
▶ [$$] Linde/Praxair: hot gases escaping   [04:41AM  Financial Times]
▶ Understanding Praxairs Dividend Yield Today   [May-31-17 03:05PM  Market Realist]
▶ 2 Top Helium Stocks to Buy in 2017   [May-30-17 12:07PM  Motley Fool]
▶ Stock Market News for May 25, 2017   [May-25-17 10:25AM  Zacks]
▶ Praxair, Linde Agree To $70 Billion Deal As Chemical Romances Bloom   [May-24-17 04:18PM  Investor's Business Daily]
▶ Praxair Introduces XactCO2 for Bars and Restaurants   [May-23-17 10:37AM  Market Realist]
▶ Praxair: Big Breakout Opens the Way Higher   [May-08-17 03:46PM  TheStreet.com]
▶ Linde chairman defends Praxair deal - paper   [May-05-17 01:11PM  Reuters]
▶ [$$] Linde Staff Rally Against Planned Praxair Merger   [Apr-27-17 01:46PM  The Wall Street Journal]
▶ Praxair tops Street 1Q forecasts   [06:10AM  Associated Press]
▶ Praxair Reports First-Quarter 2017 Results   [06:01AM  Business Wire]
▶ Praxair to Supply from Burns Harbor, Indiana   [Apr-24-17 12:56PM  Market Realist]
▶ Top Research Reports for Today: MSFT, TSLA, PNC   [Apr-03-17 05:29PM  Zacks]
▶ How APD Is Trading Compared to Its Peer   [Mar-31-17 10:36AM  Market Realist]
Stock chart of PX Financial statements of PX Annual reports of PX
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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