Intrinsic value of YPF ADR - YPF

Previous Close

$19.86

  Intrinsic Value

$4.81

stock screener

  Rating & Target

str. sell

-76%

  Value-price divergence*

+104%

Previous close

$19.86

 
Intrinsic value

$4.81

 
Up/down potential

-76%

 
Rating

str. sell

 
Value-price divergence*

+104%

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

We calculate the intrinsic value of YPF 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 7.8

 

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, %
  34.55
  21.40
  19.76
  18.28
  16.96
  15.76
  14.68
  13.72
  12.84
  12.06
  11.35
  10.72
  10.15
  9.63
  9.17
  8.75
  8.38
  8.04
  7.74
  7.46
  7.22
  6.99
  6.79
  6.62
  6.45
  6.31
  6.18
  6.06
  5.95
  5.86
  5.77
Revenue, $m
  13,446
  16,323
  19,549
  23,123
  27,044
  31,306
  35,903
  40,827
  46,071
  51,627
  57,489
  63,651
  70,109
  76,862
  83,909
  91,253
  98,897
  106,847
  115,112
  123,701
  132,626
  141,902
  151,543
  161,568
  171,995
  182,845
  194,140
  205,904
  218,163
  230,943
  244,274
Variable operating expenses, $m
 
  14,593
  17,477
  20,672
  24,177
  27,988
  32,097
  36,500
  41,188
  46,155
  51,395
  56,904
  62,678
  68,715
  75,015
  81,580
  88,414
  95,521
  102,910
  110,589
  118,568
  126,860
  135,480
  144,442
  153,764
  163,463
  173,561
  184,078
  195,037
  206,463
  218,381
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
  14,998
  14,593
  17,477
  20,672
  24,177
  27,988
  32,097
  36,500
  41,188
  46,155
  51,395
  56,904
  62,678
  68,715
  75,015
  81,580
  88,414
  95,521
  102,910
  110,589
  118,568
  126,860
  135,480
  144,442
  153,764
  163,463
  173,561
  184,078
  195,037
  206,463
  218,381
Operating income, $m
  -1,552
  1,730
  2,072
  2,451
  2,867
  3,318
  3,806
  4,328
  4,884
  5,473
  6,094
  6,747
  7,432
  8,147
  8,894
  9,673
  10,483
  11,326
  12,202
  13,112
  14,058
  15,042
  16,064
  17,126
  18,231
  19,382
  20,579
  21,826
  23,125
  24,480
  25,893
EBITDA, $m
  1,358
  4,038
  4,836
  5,721
  6,691
  7,745
  8,882
  10,101
  11,398
  12,773
  14,223
  15,747
  17,345
  19,016
  20,759
  22,576
  24,467
  26,434
  28,479
  30,604
  32,812
  35,107
  37,492
  39,972
  42,552
  45,236
  48,030
  50,941
  53,973
  57,135
  60,433
Interest expense (income), $m
  1,045
  1,097
  1,584
  2,133
  2,741
  3,408
  4,134
  4,916
  5,754
  6,646
  7,592
  8,589
  9,638
  10,737
  11,886
  13,085
  14,335
  15,636
  16,989
  18,395
  19,857
  21,375
  22,954
  24,595
  26,301
  28,075
  29,921
  31,843
  33,845
  35,931
  38,106
Earnings before tax, $m
  -1,907
  633
  488
  318
  126
  -90
  -328
  -588
  -870
  -1,174
  -1,498
  -1,842
  -2,206
  -2,589
  -2,992
  -3,412
  -3,852
  -4,310
  -4,787
  -5,283
  -5,798
  -6,334
  -6,890
  -7,468
  -8,069
  -8,693
  -9,342
  -10,018
  -10,720
  -11,451
  -12,213
Tax expense, $m
  -91
  171
  132
  86
  34
  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
Net income, $m
  -1,807
  462
  356
  232
  92
  -90
  -328
  -588
  -870
  -1,174
  -1,498
  -1,842
  -2,206
  -2,589
  -2,992
  -3,412
  -3,852
  -4,310
  -4,787
  -5,283
  -5,798
  -6,334
  -6,890
  -7,468
  -8,069
  -8,693
  -9,342
  -10,018
  -10,720
  -11,451
  -12,213

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,172
  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
  26,953
  31,271
  37,450
  44,297
  51,808
  59,973
  68,780
  78,214
  88,259
  98,903
  110,132
  121,937
  134,309
  147,245
  160,746
  174,814
  189,457
  204,688
  220,520
  236,975
  254,073
  271,843
  290,313
  309,517
  329,492
  350,277
  371,915
  394,452
  417,936
  442,420
  467,958
Adjusted assets (=assets-cash), $m
  25,781
  31,271
  37,450
  44,297
  51,808
  59,973
  68,780
  78,214
  88,259
  98,903
  110,132
  121,937
  134,309
  147,245
  160,746
  174,814
  189,457
  204,688
  220,520
  236,975
  254,073
  271,843
  290,313
  309,517
  329,492
  350,277
  371,915
  394,452
  417,936
  442,420
  467,958
Revenue / Adjusted assets
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
Average production assets, $m
  19,018
  23,081
  27,642
  32,696
  38,240
  44,267
  50,767
  57,730
  65,145
  73,001
  81,290
  90,002
  99,134
  108,683
  118,648
  129,032
  139,840
  151,082
  162,768
  174,913
  187,534
  200,649
  214,282
  228,457
  243,201
  258,542
  274,513
  291,148
  308,482
  326,554
  345,404
Working capital, $m
  304
  1,028
  1,232
  1,457
  1,704
  1,972
  2,262
  2,572
  2,902
  3,253
  3,622
  4,010
  4,417
  4,842
  5,286
  5,749
  6,230
  6,731
  7,252
  7,793
  8,355
  8,940
  9,547
  10,179
  10,836
  11,519
  12,231
  12,972
  13,744
  14,549
  15,389
Total debt, $m
  9,878
  12,571
  16,927
  21,755
  27,050
  32,806
  39,015
  45,666
  52,748
  60,252
  68,168
  76,490
  85,213
  94,333
  103,851
  113,769
  124,092
  134,830
  145,992
  157,592
  169,647
  182,174
  195,196
  208,735
  222,817
  237,470
  252,725
  268,613
  285,170
  302,431
  320,436
Total liabilities, $m
  19,352
  22,046
  26,402
  31,230
  36,525
  42,281
  48,490
  55,141
  62,223
  69,727
  77,643
  85,965
  94,688
  103,808
  113,326
  123,244
  133,567
  144,305
  155,467
  167,067
  179,122
  191,649
  204,671
  218,210
  232,292
  246,945
  262,200
  278,088
  294,645
  311,906
  329,911
Total equity, $m
  7,600
  9,225
  11,048
  13,068
  15,283
  17,692
  20,290
  23,073
  26,037
  29,176
  32,489
  35,971
  39,621
  43,437
  47,420
  51,570
  55,890
  60,383
  65,054
  69,908
  74,952
  80,194
  85,642
  91,308
  97,200
  103,332
  109,715
  116,363
  123,291
  130,514
  138,048
Total liabilities and equity, $m
  26,952
  31,271
  37,450
  44,298
  51,808
  59,973
  68,780
  78,214
  88,260
  98,903
  110,132
  121,936
  134,309
  147,245
  160,746
  174,814
  189,457
  204,688
  220,521
  236,975
  254,074
  271,843
  290,313
  309,518
  329,492
  350,277
  371,915
  394,451
  417,936
  442,420
  467,959
Debt-to-equity ratio
  1.300
  1.360
  1.530
  1.660
  1.770
  1.850
  1.920
  1.980
  2.030
  2.070
  2.100
  2.130
  2.150
  2.170
  2.190
  2.210
  2.220
  2.230
  2.240
  2.250
  2.260
  2.270
  2.280
  2.290
  2.290
  2.300
  2.300
  2.310
  2.310
  2.320
  2.320
Adjusted equity ratio
  0.249
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,807
  462
  356
  232
  92
  -90
  -328
  -588
  -870
  -1,174
  -1,498
  -1,842
  -2,206
  -2,589
  -2,992
  -3,412
  -3,852
  -4,310
  -4,787
  -5,283
  -5,798
  -6,334
  -6,890
  -7,468
  -8,069
  -8,693
  -9,342
  -10,018
  -10,720
  -11,451
  -12,213
Depreciation, amort., depletion, $m
  2,910
  2,308
  2,764
  3,270
  3,824
  4,427
  5,077
  5,773
  6,514
  7,300
  8,129
  9,000
  9,913
  10,868
  11,865
  12,903
  13,984
  15,108
  16,277
  17,491
  18,753
  20,065
  21,428
  22,846
  24,320
  25,854
  27,451
  29,115
  30,848
  32,655
  34,540
Funds from operations, $m
  2,195
  2,770
  3,121
  3,502
  3,916
  4,337
  4,749
  5,185
  5,644
  6,126
  6,631
  7,158
  7,707
  8,279
  8,873
  9,491
  10,132
  10,798
  11,490
  12,209
  12,955
  13,731
  14,538
  15,377
  16,251
  17,161
  18,109
  19,097
  20,128
  21,204
  22,327
Change in working capital, $m
  -943
  181
  203
  225
  247
  269
  290
  310
  330
  350
  369
  388
  407
  425
  444
  463
  482
  501
  521
  541
  562
  584
  607
  632
  657
  684
  712
  741
  772
  805
  840
Cash from operations, $m
  3,138
  2,589
  2,917
  3,277
  3,669
  4,068
  4,459
  4,875
  5,314
  5,776
  6,262
  6,770
  7,300
  7,853
  8,429
  9,028
  9,651
  10,297
  10,969
  11,667
  12,393
  13,147
  13,930
  14,746
  15,594
  16,477
  17,397
  18,356
  19,356
  20,399
  21,487
Maintenance CAPEX, $m
  0
  -1,902
  -2,308
  -2,764
  -3,270
  -3,824
  -4,427
  -5,077
  -5,773
  -6,514
  -7,300
  -8,129
  -9,000
  -9,913
  -10,868
  -11,865
  -12,903
  -13,984
  -15,108
  -16,277
  -17,491
  -18,753
  -20,065
  -21,428
  -22,846
  -24,320
  -25,854
  -27,451
  -29,115
  -30,848
  -32,655
New CAPEX, $m
  -4,106
  -4,064
  -4,561
  -5,054
  -5,544
  -6,027
  -6,500
  -6,963
  -7,415
  -7,856
  -8,288
  -8,713
  -9,132
  -9,548
  -9,965
  -10,384
  -10,808
  -11,242
  -11,686
  -12,145
  -12,621
  -13,116
  -13,633
  -14,175
  -14,744
  -15,342
  -15,971
  -16,634
  -17,334
  -18,072
  -18,850
Cash from investing activities, $m
  -4,235
  -5,966
  -6,869
  -7,818
  -8,814
  -9,851
  -10,927
  -12,040
  -13,188
  -14,370
  -15,588
  -16,842
  -18,132
  -19,461
  -20,833
  -22,249
  -23,711
  -25,226
  -26,794
  -28,422
  -30,112
  -31,869
  -33,698
  -35,603
  -37,590
  -39,662
  -41,825
  -44,085
  -46,449
  -48,920
  -51,505
Free cash flow, $m
  -1,097
  -3,376
  -3,952
  -4,542
  -5,145
  -5,782
  -6,468
  -7,165
  -7,874
  -8,594
  -9,327
  -10,072
  -10,832
  -11,608
  -12,404
  -13,220
  -14,061
  -14,928
  -15,825
  -16,754
  -17,719
  -18,722
  -19,768
  -20,857
  -21,995
  -23,184
  -24,428
  -25,730
  -27,093
  -28,521
  -30,018
Issuance/(repayment) of debt, $m
  1,794
  3,865
  4,356
  4,827
  5,295
  5,756
  6,209
  6,651
  7,082
  7,504
  7,917
  8,322
  8,722
  9,120
  9,518
  9,918
  10,324
  10,737
  11,162
  11,600
  12,055
  12,528
  13,022
  13,539
  14,082
  14,653
  15,255
  15,888
  16,556
  17,261
  18,005
Issuance/(repurchase) of shares, $m
  -3
  1,163
  1,466
  1,788
  2,124
  2,499
  2,926
  3,371
  3,834
  4,314
  4,810
  5,324
  5,856
  6,406
  6,974
  7,562
  8,172
  8,803
  9,457
  10,137
  10,842
  11,576
  12,339
  13,134
  13,962
  14,825
  15,726
  16,666
  17,648
  18,674
  19,747
Cash from financing (excl. dividends), $m  
  749
  5,028
  5,822
  6,615
  7,419
  8,255
  9,135
  10,022
  10,916
  11,818
  12,727
  13,646
  14,578
  15,526
  16,492
  17,480
  18,496
  19,540
  20,619
  21,737
  22,897
  24,104
  25,361
  26,673
  28,044
  29,478
  30,981
  32,554
  34,204
  35,935
  37,752
Total cash flow (excl. dividends), $m
  -239
  1,651
  1,871
  2,074
  2,274
  2,473
  2,667
  2,857
  3,042
  3,223
  3,400
  3,575
  3,747
  3,917
  4,088
  4,260
  4,434
  4,612
  4,794
  4,983
  5,178
  5,381
  5,593
  5,815
  6,049
  6,294
  6,552
  6,824
  7,111
  7,414
  7,733
Retained Cash Flow (-), $m
  106
  -1,625
  -1,823
  -2,020
  -2,216
  -2,499
  -2,926
  -3,371
  -3,834
  -4,314
  -4,810
  -5,324
  -5,856
  -6,406
  -6,974
  -7,562
  -8,172
  -8,803
  -9,457
  -10,137
  -10,842
  -11,576
  -12,339
  -13,134
  -13,962
  -14,825
  -15,726
  -16,666
  -17,648
  -18,674
  -19,747
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
 
  26
  48
  54
  59
  -26
  -259
  -514
  -792
  -1,091
  -1,410
  -1,750
  -2,109
  -2,488
  -2,886
  -3,302
  -3,737
  -4,191
  -4,663
  -5,154
  -5,665
  -6,195
  -6,746
  -7,318
  -7,913
  -8,531
  -9,173
  -9,841
  -10,536
  -11,260
  -12,014
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  25
  43
  44
  45
  -18
  -165
  -297
  -410
  -502
  -571
  -617
  -641
  -644
  -629
  -597
  -553
  -500
  -442
  -382
  -322
  -265
  -214
  -168
  -128
  -96
  -70
  -49
  -34
  -22
  -14
Current shareholders' claim on cash, %
  100
  87.1
  75.5
  65.2
  56.3
  48.6
  41.9
  36.1
  31.1
  26.8
  23.1
  19.9
  17.2
  14.9
  12.9
  11.1
  9.7
  8.4
  7.3
  6.3
  5.5
  4.8
  4.2
  3.6
  3.2
  2.7
  2.4
  2.1
  1.8
  1.6
  1.4

YPF S.A., an energy company, operates in the oil and gas upstream and downstream activities in Argentina. It engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG). The company is also involved in the refining, marketing, transportation, and distribution of oil, petroleum products, petroleum derivatives, petrochemicals, LPG, and bio-fuels, as well as in gas separation and natural gas distribution operations. As of December 31, 2015, it had interests in approximately 108 oil and gas fields; proved reserves of approximately 679 million barrels (mmbbl) of oil; and approximately 3,072 billion cubic feet of gas. The company also had a retail distribution network of 1,538 YPF-branded service stations; 38 exploration permits, including 34 onshore and 4 offshore exploration permits, as well as 108 production concessions; and 31 crude oil treatment plants and 7 pumping plants. In addition, it owns 3 refineries with annual refining capacity of approximately 116 mmbbl; approximately 2,700 kilometers of crude oil pipelines with approximately 640,000 barrels of aggregate daily transportation capacity of refined products; and crude oil tankage of approximately 7 mmbbl, as well as maintains terminal facilities at 5 Argentine ports. Additionally, the company participates in 3 power generation plants with an aggregate installed capacity of 1,622 megawatts; provides telecommunications services; and engages in the production, industrialization, processing, marketing, preparation, transportation, and storage of grains and its derivatives. It also sells diesel, fertilizers, lubricants, agrochemicals, and ensiling bags, as well as other products; and supplies fuels, lubricants, coal, asphalts, and paraffin and derivatives. The company was founded in 1977 and is based in Buenos Aires, Argentina.

FINANCIAL RATIOS  of  YPF ADR (YPF)

Valuation Ratios
P/E Ratio -4.3
Price to Sales 0.6
Price to Book 1
Price to Tangible Book
Price to Cash Flow 2.5
Price to Free Cash Flow -8.1
Growth Rates
Sales Growth Rate 34.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0.6%
Cap. Spend. - 3 Yr. Gr. Rate 18.3%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 107.4%
Total Debt to Equity 130%
Interest Coverage -1
Management Effectiveness
Return On Assets -3.2%
Ret/ On Assets - 3 Yr. Avg. 1.7%
Return On Total Capital -11.3%
Ret/ On T. Cap. - 3 Yr. Avg. 0.1%
Return On Equity -23.6%
Return On Equity - 3 Yr. Avg. -1.3%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 15.1%
Gross Margin - 3 Yr. Avg. 21.6%
EBITDA Margin 15.2%
EBITDA Margin - 3 Yr. Avg. 29.7%
Operating Margin -11.5%
Oper. Margin - 3 Yr. Avg. 4.3%
Pre-Tax Margin -14.2%
Pre-Tax Margin - 3 Yr. Avg. 6.7%
Net Profit Margin -13.4%
Net Profit Margin - 3 Yr. Avg. -1.4%
Effective Tax Rate 4.8%
Eff/ Tax Rate - 3 Yr. Avg. 49.8%
Payout Ratio -3.2%

YPF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the YPF stock intrinsic value calculation we used $13446 million for the last fiscal year's total revenue generated by YPF ADR. The default revenue input number comes from 2016 income statement of YPF ADR. 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 YPF stock valuation model: a) initial revenue growth rate of 21.4% 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 6.1%, whose default value for YPF is calculated based on our internal credit rating of YPF ADR, 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 YPF ADR.
    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 YPF stock the variable cost ratio is equal to 89.4%.

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 YPF 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 12.6% for YPF ADR.

Corporate tax rate of 27% is the nominal tax rate for YPF ADR. 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 YPF 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 YPF are equal to 141.4%.

Life of production assets of 10 years is the average useful life of capital assets used in YPF ADR 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 YPF is equal to 6.3%. 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 - $7600 million for YPF ADR - 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 394.663 million for YPF ADR 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 YPF ADR at the current share price and the inputted number of shares is $7.8 billion.

RELATED COMPANIES Price Int.Val. Rating
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TOT Total ADR 50.35 10.00  str.sell
BP BP ADR 34.00 6.50  str.sell
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CEO CNOOC ADR 114.76 30.11  str.sell

COMPANY NEWS

▶ Petrobras 2Q Earnings Disappoint, Stock Falls   [Aug-11-17 03:11PM  Barrons.com]
▶ How Chevron Stock Has Performed ahead of 2Q17 Earnings   [Jul-20-17 06:06PM  Market Realist]
▶ Shells Beta: Could the Stock Pop in a Rising Market?   [Jun-19-17 09:07AM  Market Realist]
▶ YPF SA reports   [Jun-07-17 12:01PM  GlobeNewswire]
▶ ETFs with exposure to YPF SA : May 31, 2017   [May-31-17 12:52PM  Capital Cube]
▶ OPEC Oil Cuts? Saudis, Russia, Iran & Even China Agree   [May-08-17 02:58PM  Barrons.com]
▶ ETFs with exposure to YPF SA : April 19, 2017   [Apr-19-17 02:44PM  Capital Cube]
▶ 15 Latin American Stocks To Own Now   [Apr-18-17 03:02PM  Barrons.com]
▶ ETFs with exposure to YPF SA : April 5, 2017   [Apr-05-17 05:47PM  Capital Cube]
▶ [$$] OxyChem Backs New Maxus Chapter 11 Plan   [Mar-29-17 12:52PM  at The Wall Street Journal]
▶ Deciphering Todays Oil Markets   [Mar-14-17 03:33PM  Oilprice.com]
▶ Should You Sell YPF (YPF) Before Earnings?   [Mar-01-17 08:55AM  Zacks]
▶ ETFs with exposure to YPF SA : January 11, 2017   [Jan-11-17 01:35PM  Capital Cube]
▶ [$$] Oil and Gas Firms Pledge $5 Billion in Investments in Argentina This Year   [Jan-10-17 12:39PM  at The Wall Street Journal]
▶ ETFs with exposure to YPF SA : December 9, 2016   [Dec-09-16 12:52PM  Capital Cube]
▶ Is YPF SA (ADR) (YPF) A Good Stock To Buy?   [Dec-02-16 07:39AM  Insider Monkey]
▶ Are Hedge Fund Short Sellers, Not OPEC, Driving Oil Price?   [Nov-22-16 10:53AM  at Barrons.com]
▶ OPEC Talks Cuts Thursday In Doha, Oil Weakens   [Nov-16-16 06:09PM  at Barrons.com]
▶ Trump & Energy: What's Next For Oil, Iran?   [Nov-09-16 10:00AM  at Barrons.com]
▶ [$$] Maxus Wins More Time to File Chapter 11 Plan   [Oct-21-16 10:43AM  at The Wall Street Journal]
▶ Argentina: How To Invest In Inflation & Recovery   [Sep-26-16 10:10AM  at Barrons.com]
▶ [$$] Maxus Energy Defends Environmental Settlement With Parent   [Aug-30-16 10:11PM  at The Wall Street Journal]
▶ [$$] Maxus Energy Defends Environmental Settlement With Parent   [09:31PM  at The Wall Street Journal]
▶ [$$] OxyChem Takes Aim at Maxus Loans   [Aug-05-16 03:05PM  at The Wall Street Journal]
▶ Argentina: YPF Oil Earnings Weak, Stock Lower   [11:58AM  at Barrons.com]
▶ 3 Experts: What's Next For Argentina Economy, Investments?   [Jul-13-16 01:39PM  at Barrons.com]
▶ Argentinas YPF Issues Local Currency Debt (YPF)   [06:00AM  at Investopedia]
Stock chart of YPF Financial statements of YPF
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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