Intrinsic value of Allergan - AGN

Previous Close

$152.27

  Intrinsic Value

$108.99

stock screener

  Rating & Target

sell

-28%

Previous close

$152.27

 
Intrinsic value

$108.99

 
Up/down potential

-28%

 
Rating

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 51.7

 

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, %
  2.90
  3.11
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
Revenue, $m
  16,403
  16,913
  17,471
  18,077
  18,732
  19,436
  20,191
  20,998
  21,858
  22,773
  23,745
  24,776
  25,868
  27,023
  28,244
  29,534
  30,896
  32,333
  33,847
  35,444
  37,125
  38,896
  40,761
  42,723
  44,788
  46,959
  49,244
  51,646
  54,171
  56,826
Variable operating expenses, $m
  18,150
  18,390
  18,652
  18,936
  19,243
  19,574
  19,928
  20,307
  20,711
  21,140
  11,145
  11,629
  12,142
  12,684
  13,257
  13,863
  14,502
  15,176
  15,887
  16,636
  17,426
  18,257
  19,132
  20,053
  21,022
  22,042
  23,114
  24,241
  25,427
  26,673
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
  18,150
  18,390
  18,652
  18,936
  19,243
  19,574
  19,928
  20,307
  20,711
  21,140
  11,145
  11,629
  12,142
  12,684
  13,257
  13,863
  14,502
  15,176
  15,887
  16,636
  17,426
  18,257
  19,132
  20,053
  21,022
  22,042
  23,114
  24,241
  25,427
  26,673
Operating income, $m
  -1,747
  -1,477
  -1,181
  -859
  -511
  -138
  263
  691
  1,147
  1,633
  12,600
  13,147
  13,726
  14,339
  14,987
  15,672
  16,394
  17,157
  17,960
  18,807
  19,700
  20,639
  21,629
  22,670
  23,765
  24,918
  26,130
  27,405
  28,745
  30,153
EBITDA, $m
  12,559
  12,950
  13,377
  13,841
  14,342
  14,882
  15,460
  16,077
  16,736
  17,436
  18,181
  18,970
  19,806
  20,690
  21,625
  22,613
  23,656
  24,756
  25,916
  27,138
  28,425
  29,781
  31,209
  32,711
  34,292
  35,955
  37,704
  39,543
  41,477
  43,510
Interest expense (income), $m
  0
  1,624
  1,688
  1,763
  1,846
  1,935
  2,032
  2,136
  2,247
  2,366
  2,493
  2,629
  2,772
  2,924
  3,086
  3,256
  3,437
  3,627
  3,828
  4,041
  4,264
  4,500
  4,749
  5,010
  5,286
  5,575
  5,880
  6,201
  6,539
  6,893
  7,266
Earnings before tax, $m
  -3,371
  -3,164
  -2,944
  -2,704
  -2,447
  -2,169
  -1,873
  -1,556
  -1,219
  -861
  9,971
  10,374
  10,802
  11,253
  11,731
  12,235
  12,767
  13,328
  13,920
  14,543
  15,200
  15,891
  16,619
  17,384
  18,190
  19,038
  19,929
  20,866
  21,851
  22,887
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2,692
  2,801
  2,916
  3,038
  3,167
  3,303
  3,447
  3,599
  3,758
  3,927
  4,104
  4,291
  4,487
  4,694
  4,911
  5,140
  5,381
  5,634
  5,900
  6,180
Net income, $m
  -3,371
  -3,164
  -2,944
  -2,704
  -2,447
  -2,169
  -1,873
  -1,556
  -1,219
  -861
  7,279
  7,573
  7,885
  8,215
  8,563
  8,931
  9,320
  9,729
  10,161
  10,616
  11,096
  11,600
  12,132
  12,691
  13,279
  13,897
  14,548
  15,232
  15,951
  16,708

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
  120,610
  124,361
  128,464
  132,920
  137,735
  142,914
  148,464
  154,397
  160,721
  167,449
  174,595
  182,175
  190,203
  198,698
  207,678
  217,164
  227,177
  237,740
  248,878
  260,616
  272,981
  286,003
  299,712
  314,140
  329,320
  345,290
  362,086
  379,748
  398,318
  417,840
Adjusted assets (=assets-cash), $m
  120,610
  124,361
  128,464
  132,920
  137,735
  142,914
  148,464
  154,397
  160,721
  167,449
  174,595
  182,175
  190,203
  198,698
  207,678
  217,164
  227,177
  237,740
  248,878
  260,616
  272,981
  286,003
  299,712
  314,140
  329,320
  345,290
  362,086
  379,748
  398,318
  417,840
Revenue / Adjusted assets
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
Average production assets, $m
  56,672
  58,435
  60,363
  62,457
  64,719
  67,152
  69,760
  72,548
  75,519
  78,681
  82,039
  85,600
  89,373
  93,364
  97,584
  102,041
  106,746
  111,709
  116,943
  122,458
  128,268
  134,387
  140,829
  147,608
  154,741
  162,245
  170,137
  178,436
  187,162
  196,335
Working capital, $m
  -705
  -727
  -751
  -777
  -805
  -836
  -868
  -903
  -940
  -979
  -1,021
  -1,065
  -1,112
  -1,162
  -1,215
  -1,270
  -1,329
  -1,390
  -1,455
  -1,524
  -1,596
  -1,673
  -1,753
  -1,837
  -1,926
  -2,019
  -2,117
  -2,221
  -2,329
  -2,444
Total debt, $m
  31,254
  32,650
  34,176
  35,834
  37,625
  39,551
  41,616
  43,823
  46,176
  48,679
  51,337
  54,156
  57,143
  60,303
  63,644
  67,172
  70,897
  74,827
  78,970
  83,337
  87,937
  92,781
  97,880
  103,247
  108,895
  114,835
  121,083
  127,654
  134,562
  141,824
Total liabilities, $m
  44,867
  46,262
  47,789
  49,446
  51,237
  53,164
  55,229
  57,435
  59,788
  62,291
  64,949
  67,769
  70,755
  73,916
  77,256
  80,785
  84,510
  88,439
  92,583
  96,949
  101,549
  106,393
  111,493
  116,860
  122,507
  128,448
  134,696
  141,266
  148,174
  155,436
Total equity, $m
  75,743
  78,099
  80,675
  83,474
  86,498
  89,750
  93,236
  96,961
  100,933
  105,158
  109,646
  114,406
  119,447
  124,782
  130,422
  136,379
  142,667
  149,301
  156,295
  163,667
  171,432
  179,610
  188,219
  197,280
  206,813
  216,842
  227,390
  238,482
  250,144
  262,403
Total liabilities and equity, $m
  120,610
  124,361
  128,464
  132,920
  137,735
  142,914
  148,465
  154,396
  160,721
  167,449
  174,595
  182,175
  190,202
  198,698
  207,678
  217,164
  227,177
  237,740
  248,878
  260,616
  272,981
  286,003
  299,712
  314,140
  329,320
  345,290
  362,086
  379,748
  398,318
  417,839
Debt-to-equity ratio
  0.410
  0.420
  0.420
  0.430
  0.430
  0.440
  0.450
  0.450
  0.460
  0.460
  0.470
  0.470
  0.480
  0.480
  0.490
  0.490
  0.500
  0.500
  0.510
  0.510
  0.510
  0.520
  0.520
  0.520
  0.530
  0.530
  0.530
  0.540
  0.540
  0.540
Adjusted equity ratio
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3,371
  -3,164
  -2,944
  -2,704
  -2,447
  -2,169
  -1,873
  -1,556
  -1,219
  -861
  7,279
  7,573
  7,885
  8,215
  8,563
  8,931
  9,320
  9,729
  10,161
  10,616
  11,096
  11,600
  12,132
  12,691
  13,279
  13,897
  14,548
  15,232
  15,951
  16,708
Depreciation, amort., depletion, $m
  14,306
  14,426
  14,557
  14,700
  14,854
  15,019
  15,197
  15,386
  15,588
  15,804
  5,581
  5,823
  6,080
  6,351
  6,638
  6,942
  7,262
  7,599
  7,955
  8,330
  8,726
  9,142
  9,580
  10,041
  10,527
  11,037
  11,574
  12,139
  12,732
  13,356
Funds from operations, $m
  10,935
  11,262
  11,614
  11,995
  12,407
  12,850
  13,324
  13,830
  14,369
  14,943
  12,860
  13,396
  13,965
  14,566
  15,202
  15,873
  16,581
  17,329
  18,117
  18,947
  19,821
  20,742
  21,712
  22,732
  23,805
  24,934
  26,122
  27,371
  28,684
  30,064
Change in working capital, $m
  -20
  -22
  -24
  -26
  -28
  -30
  -32
  -35
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -55
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -89
  -93
  -98
  -103
  -109
  -114
Cash from operations, $m
  10,955
  11,284
  11,638
  12,021
  12,435
  12,880
  13,356
  13,865
  14,406
  14,982
  12,902
  13,441
  14,012
  14,616
  15,254
  15,928
  16,640
  17,391
  18,182
  19,015
  19,894
  20,818
  21,792
  22,816
  23,894
  25,028
  26,220
  27,474
  28,792
  30,178
Maintenance CAPEX, $m
  -3,746
  -3,855
  -3,975
  -4,106
  -4,249
  -4,403
  -4,568
  -4,746
  -4,935
  -5,137
  -5,352
  -5,581
  -5,823
  -6,080
  -6,351
  -6,638
  -6,942
  -7,262
  -7,599
  -7,955
  -8,330
  -8,726
  -9,142
  -9,580
  -10,041
  -10,527
  -11,037
  -11,574
  -12,139
  -12,732
New CAPEX, $m
  -1,602
  -1,763
  -1,928
  -2,094
  -2,262
  -2,433
  -2,608
  -2,787
  -2,972
  -3,162
  -3,358
  -3,561
  -3,772
  -3,992
  -4,220
  -4,457
  -4,705
  -4,963
  -5,233
  -5,515
  -5,810
  -6,119
  -6,441
  -6,779
  -7,133
  -7,504
  -7,892
  -8,299
  -8,726
  -9,173
Cash from investing activities, $m
  -5,348
  -5,618
  -5,903
  -6,200
  -6,511
  -6,836
  -7,176
  -7,533
  -7,907
  -8,299
  -8,710
  -9,142
  -9,595
  -10,072
  -10,571
  -11,095
  -11,647
  -12,225
  -12,832
  -13,470
  -14,140
  -14,845
  -15,583
  -16,359
  -17,174
  -18,031
  -18,929
  -19,873
  -20,865
  -21,905
Free cash flow, $m
  5,606
  5,666
  5,735
  5,821
  5,924
  6,044
  6,180
  6,332
  6,500
  6,683
  4,191
  4,299
  4,416
  4,545
  4,683
  4,833
  4,993
  5,165
  5,349
  5,545
  5,753
  5,974
  6,208
  6,457
  6,720
  6,997
  7,291
  7,601
  7,928
  8,273
Issuance/(repayment) of debt, $m
  1,179
  1,395
  1,526
  1,658
  1,791
  1,927
  2,065
  2,207
  2,353
  2,503
  2,658
  2,819
  2,987
  3,160
  3,341
  3,529
  3,725
  3,930
  4,143
  4,366
  4,600
  4,844
  5,100
  5,367
  5,647
  5,941
  6,248
  6,570
  6,908
  7,262
Issuance/(repurchase) of shares, $m
  5,293
  5,520
  5,520
  5,503
  5,470
  5,422
  5,359
  5,282
  5,191
  5,086
  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  
  6,472
  6,915
  7,046
  7,161
  7,261
  7,349
  7,424
  7,489
  7,544
  7,589
  2,658
  2,819
  2,987
  3,160
  3,341
  3,529
  3,725
  3,930
  4,143
  4,366
  4,600
  4,844
  5,100
  5,367
  5,647
  5,941
  6,248
  6,570
  6,908
  7,262
Total cash flow (excl. dividends), $m
  12,079
  12,581
  12,781
  12,982
  13,186
  13,392
  13,604
  13,820
  14,043
  14,272
  6,850
  7,118
  7,403
  7,705
  8,024
  8,362
  8,718
  9,095
  9,492
  9,911
  10,353
  10,818
  11,308
  11,824
  12,367
  12,938
  13,539
  14,171
  14,836
  15,535
Retained Cash Flow (-), $m
  -5,293
  -5,520
  -5,520
  -5,503
  -5,470
  -5,422
  -5,359
  -5,282
  -5,191
  -5,086
  -4,488
  -4,760
  -5,042
  -5,335
  -5,640
  -5,957
  -6,288
  -6,634
  -6,994
  -7,371
  -7,765
  -8,178
  -8,609
  -9,061
  -9,534
  -10,029
  -10,548
  -11,092
  -11,662
  -12,260
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
  6,785
  7,061
  7,261
  7,479
  7,715
  7,971
  8,245
  8,538
  8,852
  9,186
  2,362
  2,358
  2,361
  2,370
  2,384
  2,404
  2,430
  2,461
  2,498
  2,540
  2,587
  2,640
  2,699
  2,763
  2,833
  2,909
  2,991
  3,079
  3,174
  3,275
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
  6,432
  6,311
  6,086
  5,843
  5,583
  5,305
  5,012
  4,703
  4,382
  4,051
  919
  802
  694
  595
  506
  425
  354
  290
  235
  188
  148
  115
  87
  65
  48
  34
  24
  16
  11
  7
Current shareholders' claim on cash, %
  90.7
  82.2
  74.6
  68.0
  62.2
  57.1
  52.6
  48.7
  45.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2
  42.2

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 (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 $15940.7 million for the last fiscal year's total revenue generated by Allergan. The default revenue input number comes from 0001 income statement of Allergan. 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 2.9% 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, 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.
    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 112.5%.

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.

Corporate tax rate of 27% is the nominal tax rate for Allergan. 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 345.5%.

Life of production assets of 14.7 years is the average useful life of capital assets used in Allergan 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 -4.3%. 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 - $73821.1 million for Allergan - 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 339.444 million for Allergan 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 at the current share price and the inputted number of shares is $51.7 billion.

COMPANY NEWS

▶ Is Allergan plc (AGN) A Good Stock To Buy?   [Dec-09-18 12:30PM  Insider Monkey]
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▶ 5 Biotech Stocks to Scoop Up for Big Dividends   [Nov-27-18 11:22AM  InvestorPlace]
▶ Spinal-cord stimulators help some patients, injure others   [Nov-26-18 06:35PM  Associated Press]
▶ The regulatory impact on biotech and health care stocks   [Nov-19-18 02:18PM  CNBC Videos]
▶ Stocks That Fell to 3-Year Lows in the Week of Nov. 16   [Nov-17-18 02:18PM  GuruFocus.com]
▶ Final trades: Allergan, Verizon, JPMorgan, Visa & Yelp   [Nov-12-18 01:18PM  CNBC Videos]
▶ Jerome Dodson Comments on Allergan   [Oct-31-18 05:48PM  GuruFocus.com]
▶ US Stock Market Rises Tuesday   [Oct-30-18 01:47PM  GuruFocus.com]
▶ Allergan Earnings, Revenue beat in Q3   [09:42AM  Investing.com]
▶ Allergan: 3Q Earnings Snapshot   [07:29AM  Associated Press]
▶ Allergan's Q3 Earnings Outlook   [Oct-29-18 02:16PM  Benzinga]
▶ Stocks That Fell to 3-Year Lows in the Week of Oct. 26   [Oct-27-18 04:40PM  GuruFocus.com]
▶ Better Buy: Crispr Therapeutics AG vs. Editas   [Oct-09-18 04:35PM  Motley Fool]
▶ Genentech's first scientist now focused on Bay Area's latest biotech IPO   [Oct-01-18 05:30PM  American City Business Journals]

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