Intrinsic value of Allergan plc. - AGN

Previous Close

$159.84

  Intrinsic Value

$18.07

stock screener

  Rating & Target

str. sell

-89%

Previous close

$159.84

 
Intrinsic value

$18.07

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of AGN 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 0001), $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 53.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  16,103
  16,473
  16,896
  17,372
  17,898
  18,476
  19,106
  19,787
  20,520
  21,308
  22,150
  23,049
  24,007
  25,024
  26,103
  27,247
  28,458
  29,739
  31,092
  32,520
  34,028
  35,617
  37,293
  39,059
  40,918
  42,876
  44,937
  47,105
  49,386
  51,786
Variable operating expenses, $m
  21,898
  22,195
  22,535
  22,917
  23,340
  23,805
  24,310
  24,857
  25,447
  26,079
  17,795
  18,518
  19,287
  20,104
  20,971
  21,890
  22,863
  23,892
  24,979
  26,126
  27,337
  28,615
  29,961
  31,379
  32,873
  34,446
  36,101
  37,844
  39,676
  41,604
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
  21,898
  22,195
  22,535
  22,917
  23,340
  23,805
  24,310
  24,857
  25,447
  26,079
  17,795
  18,518
  19,287
  20,104
  20,971
  21,890
  22,863
  23,892
  24,979
  26,126
  27,337
  28,615
  29,961
  31,379
  32,873
  34,446
  36,101
  37,844
  39,676
  41,604
Operating income, $m
  -5,795
  -5,722
  -5,639
  -5,545
  -5,442
  -5,328
  -5,205
  -5,071
  -4,926
  -4,771
  4,355
  4,532
  4,720
  4,920
  5,132
  5,357
  5,595
  5,847
  6,113
  6,394
  6,690
  7,003
  7,332
  7,679
  8,045
  8,430
  8,835
  9,261
  9,710
  10,182
EBITDA, $m
  6,681
  6,835
  7,010
  7,208
  7,426
  7,666
  7,927
  8,209
  8,514
  8,841
  9,190
  9,563
  9,960
  10,382
  10,830
  11,305
  11,807
  12,339
  12,900
  13,493
  14,118
  14,778
  15,473
  16,205
  16,977
  17,789
  18,644
  19,544
  20,490
  21,486
Interest expense (income), $m
  0
  1,285
  1,324
  1,371
  1,424
  1,483
  1,550
  1,622
  1,701
  1,786
  1,878
  1,977
  2,083
  2,196
  2,316
  2,443
  2,579
  2,722
  2,874
  3,035
  3,204
  3,383
  3,572
  3,772
  3,982
  4,203
  4,437
  4,682
  4,941
  5,213
  5,499
Earnings before tax, $m
  -7,080
  -7,046
  -7,010
  -6,969
  -6,925
  -6,878
  -6,827
  -6,772
  -6,713
  -6,650
  2,378
  2,449
  2,524
  2,604
  2,689
  2,779
  2,873
  2,973
  3,079
  3,190
  3,307
  3,430
  3,560
  3,697
  3,842
  3,993
  4,153
  4,321
  4,497
  4,683
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  642
  661
  682
  703
  726
  750
  776
  803
  831
  861
  893
  926
  961
  998
  1,037
  1,078
  1,121
  1,167
  1,214
  1,264
Net income, $m
  -7,080
  -7,046
  -7,010
  -6,969
  -6,925
  -6,878
  -6,827
  -6,772
  -6,713
  -6,650
  1,736
  1,788
  1,843
  1,901
  1,963
  2,028
  2,097
  2,170
  2,247
  2,328
  2,414
  2,504
  2,599
  2,699
  2,804
  2,915
  3,032
  3,154
  3,283
  3,419

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  103,889
  106,278
  109,009
  112,076
  115,474
  119,202
  123,261
  127,656
  132,390
  137,471
  142,906
  148,706
  154,882
  161,445
  168,409
  175,789
  183,601
  191,863
  200,592
  209,809
  219,534
  229,790
  240,601
  251,991
  263,988
  276,618
  289,913
  303,903
  318,621
  334,102
Adjusted assets (=assets-cash), $m
  103,889
  106,278
  109,009
  112,076
  115,474
  119,202
  123,261
  127,656
  132,390
  137,471
  142,906
  148,706
  154,882
  161,445
  168,409
  175,789
  183,601
  191,863
  200,592
  209,809
  219,534
  229,790
  240,601
  251,991
  263,988
  276,618
  289,913
  303,903
  318,621
  334,102
Revenue / Adjusted assets
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
Average production assets, $m
  51,319
  52,500
  53,849
  55,364
  57,042
  58,884
  60,889
  63,060
  65,399
  67,909
  70,594
  73,459
  76,509
  79,751
  83,191
  86,837
  90,696
  94,777
  99,089
  103,642
  108,446
  113,513
  118,853
  124,480
  130,406
  136,645
  143,213
  150,124
  157,394
  165,041
Working capital, $m
  -290
  -297
  -304
  -313
  -322
  -333
  -344
  -356
  -369
  -384
  -399
  -415
  -432
  -450
  -470
  -490
  -512
  -535
  -560
  -585
  -612
  -641
  -671
  -703
  -737
  -772
  -809
  -848
  -889
  -932
Total debt, $m
  24,524
  25,384
  26,368
  27,472
  28,695
  30,037
  31,498
  33,080
  34,785
  36,614
  38,570
  40,658
  42,882
  45,244
  47,751
  50,408
  53,221
  56,195
  59,337
  62,655
  66,156
  69,849
  73,740
  77,841
  82,160
  86,707
  91,493
  96,529
  101,828
  107,401
Total liabilities, $m
  37,400
  38,260
  39,243
  40,347
  41,571
  42,913
  44,374
  45,956
  47,660
  49,489
  51,446
  53,534
  55,757
  58,120
  60,627
  63,284
  66,097
  69,071
  72,213
  75,531
  79,032
  82,724
  86,616
  90,717
  95,036
  99,583
  104,369
  109,405
  114,704
  120,277
Total equity, $m
  66,489
  68,018
  69,766
  71,729
  73,903
  76,289
  78,887
  81,700
  84,730
  87,981
  91,460
  95,172
  99,124
  103,325
  107,782
  112,505
  117,505
  122,792
  128,379
  134,278
  140,502
  147,066
  153,984
  161,274
  168,952
  177,036
  185,544
  194,498
  203,917
  213,825
Total liabilities and equity, $m
  103,889
  106,278
  109,009
  112,076
  115,474
  119,202
  123,261
  127,656
  132,390
  137,470
  142,906
  148,706
  154,881
  161,445
  168,409
  175,789
  183,602
  191,863
  200,592
  209,809
  219,534
  229,790
  240,600
  251,991
  263,988
  276,619
  289,913
  303,903
  318,621
  334,102
Debt-to-equity ratio
  0.370
  0.370
  0.380
  0.380
  0.390
  0.390
  0.400
  0.400
  0.410
  0.420
  0.420
  0.430
  0.430
  0.440
  0.440
  0.450
  0.450
  0.460
  0.460
  0.470
  0.470
  0.470
  0.480
  0.480
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7,080
  -7,046
  -7,010
  -6,969
  -6,925
  -6,878
  -6,827
  -6,772
  -6,713
  -6,650
  1,736
  1,788
  1,843
  1,901
  1,963
  2,028
  2,097
  2,170
  2,247
  2,328
  2,414
  2,504
  2,599
  2,699
  2,804
  2,915
  3,032
  3,154
  3,283
  3,419
Depreciation, amort., depletion, $m
  12,476
  12,557
  12,649
  12,753
  12,868
  12,994
  13,131
  13,280
  13,440
  13,612
  4,835
  5,031
  5,240
  5,462
  5,698
  5,948
  6,212
  6,492
  6,787
  7,099
  7,428
  7,775
  8,141
  8,526
  8,932
  9,359
  9,809
  10,282
  10,780
  11,304
Funds from operations, $m
  5,396
  5,510
  5,640
  5,784
  5,943
  6,116
  6,305
  6,509
  6,728
  6,962
  6,571
  6,819
  7,083
  7,364
  7,661
  7,976
  8,310
  8,662
  9,034
  9,427
  9,842
  10,279
  10,740
  11,225
  11,736
  12,274
  12,841
  13,437
  14,063
  14,723
Change in working capital, $m
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
Cash from operations, $m
  5,402
  5,517
  5,647
  5,792
  5,952
  6,127
  6,316
  6,521
  6,741
  6,976
  6,586
  6,835
  7,100
  7,382
  7,680
  7,997
  8,331
  8,685
  9,059
  9,453
  9,869
  10,308
  10,770
  11,257
  11,770
  12,310
  12,878
  13,476
  14,105
  14,766
Maintenance CAPEX, $m
  -3,446
  -3,515
  -3,596
  -3,688
  -3,792
  -3,907
  -4,033
  -4,170
  -4,319
  -4,479
  -4,651
  -4,835
  -5,031
  -5,240
  -5,462
  -5,698
  -5,948
  -6,212
  -6,492
  -6,787
  -7,099
  -7,428
  -7,775
  -8,141
  -8,526
  -8,932
  -9,359
  -9,809
  -10,282
  -10,780
New CAPEX, $m
  -1,003
  -1,180
  -1,349
  -1,515
  -1,678
  -1,842
  -2,005
  -2,171
  -2,339
  -2,510
  -2,685
  -2,865
  -3,051
  -3,242
  -3,440
  -3,646
  -3,859
  -4,081
  -4,312
  -4,553
  -4,804
  -5,066
  -5,340
  -5,627
  -5,926
  -6,239
  -6,567
  -6,911
  -7,270
  -7,647
Cash from investing activities, $m
  -4,449
  -4,695
  -4,945
  -5,203
  -5,470
  -5,749
  -6,038
  -6,341
  -6,658
  -6,989
  -7,336
  -7,700
  -8,082
  -8,482
  -8,902
  -9,344
  -9,807
  -10,293
  -10,804
  -11,340
  -11,903
  -12,494
  -13,115
  -13,768
  -14,452
  -15,171
  -15,926
  -16,720
  -17,552
  -18,427
Free cash flow, $m
  952
  822
  702
  589
  482
  378
  278
  180
  83
  -13
  -750
  -865
  -982
  -1,100
  -1,222
  -1,347
  -1,476
  -1,608
  -1,745
  -1,887
  -2,034
  -2,187
  -2,345
  -2,510
  -2,682
  -2,862
  -3,049
  -3,244
  -3,448
  -3,662
Issuance/(repayment) of debt, $m
  726
  860
  983
  1,104
  1,223
  1,342
  1,461
  1,582
  1,704
  1,829
  1,957
  2,088
  2,223
  2,363
  2,507
  2,657
  2,812
  2,974
  3,143
  3,318
  3,501
  3,692
  3,892
  4,101
  4,319
  4,547
  4,786
  5,036
  5,298
  5,573
Issuance/(repurchase) of shares, $m
  8,455
  8,576
  8,758
  8,932
  9,100
  9,264
  9,425
  9,584
  9,743
  9,902
  1,743
  1,924
  2,109
  2,299
  2,494
  2,695
  2,902
  3,117
  3,339
  3,570
  3,810
  4,060
  4,320
  4,591
  4,873
  5,169
  5,477
  5,799
  6,136
  6,489
Cash from financing (excl. dividends), $m  
  9,181
  9,436
  9,741
  10,036
  10,323
  10,606
  10,886
  11,166
  11,447
  11,731
  3,700
  4,012
  4,332
  4,662
  5,001
  5,352
  5,714
  6,091
  6,482
  6,888
  7,311
  7,752
  8,212
  8,692
  9,192
  9,716
  10,263
  10,835
  11,434
  12,062
Total cash flow (excl. dividends), $m
  10,133
  10,258
  10,443
  10,625
  10,805
  10,984
  11,164
  11,345
  11,530
  11,718
  2,950
  3,147
  3,351
  3,561
  3,779
  4,005
  4,239
  4,483
  4,737
  5,001
  5,277
  5,565
  5,866
  6,181
  6,510
  6,854
  7,214
  7,591
  7,987
  8,401
Retained Cash Flow (-), $m
  -8,455
  -8,576
  -8,758
  -8,932
  -9,100
  -9,264
  -9,425
  -9,584
  -9,743
  -9,902
  -3,479
  -3,712
  -3,952
  -4,200
  -4,457
  -4,723
  -5,000
  -5,287
  -5,587
  -5,899
  -6,224
  -6,564
  -6,919
  -7,290
  -7,678
  -8,084
  -8,509
  -8,954
  -9,420
  -9,908
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
  1,678
  1,682
  1,685
  1,693
  1,705
  1,720
  1,739
  1,762
  1,787
  1,816
  -529
  -565
  -601
  -639
  -678
  -719
  -761
  -804
  -850
  -897
  -947
  -999
  -1,053
  -1,109
  -1,168
  -1,230
  -1,294
  -1,362
  -1,433
  -1,507
Discount rate, %
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
  1,591
  1,503
  1,413
  1,323
  1,234
  1,145
  1,057
  970
  885
  801
  -206
  -192
  -177
  -161
  -144
  -127
  -111
  -95
  -80
  -66
  -54
  -43
  -34
  -26
  -20
  -14
  -10
  -7
  -5
  -3
Current shareholders' claim on cash, %
  86.3
  74.5
  64.4
  55.6
  48.2
  41.7
  36.3
  31.6
  27.5
  24.1
  23.5
  22.9
  22.3
  21.7
  21.1
  20.5
  19.8
  19.2
  18.6
  18.0
  17.4
  16.8
  16.2
  15.6
  15.1
  14.5
  14.0
  13.5
  13.0
  12.5

Allergan plc, a specialty pharmaceutical company, develops, manufactures, markets, and distributes medical aesthetics, biosimilar, and over-the-counter pharmaceutical products worldwide. It operates through US Specialized Therapeutics, US General Medicine, and International segments. The company offers a portfolio of products that provide treatment for the central nervous system, gastroenterology, women’s health and urology, ophthalmology, neurosciences, medical aesthetics, dermatology, plastic surgery, liver disease, inflammation, metabolic syndromes, and fibrosis, as well as Alzheimer’s disease. It is also involved in developing ocular implants that reduce intraocular pressure associated with glaucoma; medical devices for the correction of prominent ears; and intranasal neurostimulation devices, as well as other dry eye products. In addition, the company distributes generic and branded pharmaceutical products primarily to independent and chain pharmacies, nursing homes, mail order pharmacies, hospitals, clinics, and physician offices. Further, it develops a portfolio of breast implants and tissue expanders. The company has licensing agreement with Assembly Biosciences, Inc.; Mimetogen Pharmaceuticals, Inc.; Almirall, S.A; Naurex, Inc.; and Merck & Co. The company was formerly known as Actavis plc and changed its name to Allergan plc in June 2015. Allergan plc was founded in 1983 and is headquartered in Dublin, Ireland.

FINANCIAL RATIOS  of  Allergan plc. (AGN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AGN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AGN stock intrinsic value calculation we used $15787 million for the last fiscal year's total revenue generated by Allergan plc.. The default revenue input number comes from 0001 income statement of Allergan plc.. 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 AGN 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 5.5%, whose default value for AGN is calculated based on our internal credit rating of Allergan plc., 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 Allergan plc..
    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 AGN stock the variable cost ratio is equal to 137.1%.

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 AGN 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 5.4% for Allergan plc..

Corporate tax rate of 27% is the nominal tax rate for Allergan plc.. 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 AGN 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 AGN are equal to 318.7%.

Life of production assets of 14.6 years is the average useful life of capital assets used in Allergan plc. 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 AGN is equal to -1.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $65114.1 million for Allergan plc. - 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 332.628 million for Allergan plc. 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 Allergan plc. at the current share price and the inputted number of shares is $53.2 billion.

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