Intrinsic value of Andeavor - ANDV

Previous Close

$118.21

  Intrinsic Value

$5,021

stock screener

  Rating & Target

str. buy

+999%

Previous close

$118.21

 
Intrinsic value

$5,021

 
Up/down potential

+999%

 
Rating

str. buy

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

We calculate the intrinsic value of ANDV 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -14.38
  50.30
  45.77
  41.69
  38.02
  34.72
  31.75
  29.07
  26.67
  24.50
  22.55
  20.80
  19.22
  17.79
  16.51
  15.36
  14.33
  13.39
  12.55
  11.80
  11.12
  10.51
  9.96
  9.46
  9.01
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
Revenue, $m
  24,582
  36,947
  53,857
  76,312
  105,329
  141,900
  186,952
  241,307
  305,656
  380,543
  466,356
  563,335
  671,583
  791,085
  921,730
  1,063,337
  1,215,680
  1,378,510
  1,551,579
  1,734,654
  1,927,537
  2,130,071
  2,342,156
  2,563,747
  2,794,867
  3,035,600
  3,286,100
  3,546,585
  3,817,338
  4,098,705
  4,391,094
Variable operating expenses, $m
 
  24,893
  36,277
  51,394
  70,929
  95,550
  125,880
  162,474
  205,795
  256,211
  313,982
  379,252
  452,128
  532,580
  620,534
  715,867
  818,429
  928,050
  1,044,565
  1,167,816
  1,297,670
  1,434,022
  1,576,803
  1,725,984
  1,881,580
  2,043,648
  2,212,292
  2,387,657
  2,569,935
  2,759,359
  2,956,203
Fixed operating expenses, $m
 
  6,862
  7,034
  7,210
  7,390
  7,575
  7,764
  7,958
  8,157
  8,361
  8,570
  8,784
  9,004
  9,229
  9,460
  9,696
  9,939
  10,187
  10,442
  10,703
  10,971
  11,245
  11,526
  11,814
  12,109
  12,412
  12,722
  13,041
  13,367
  13,701
  14,043
Total operating expenses, $m
  23,101
  31,755
  43,311
  58,604
  78,319
  103,125
  133,644
  170,432
  213,952
  264,572
  322,552
  388,036
  461,132
  541,809
  629,994
  725,563
  828,368
  938,237
  1,055,007
  1,178,519
  1,308,641
  1,445,267
  1,588,329
  1,737,798
  1,893,689
  2,056,060
  2,225,014
  2,400,698
  2,583,302
  2,773,060
  2,970,246
Operating income, $m
  1,481
  5,192
  10,546
  17,708
  27,010
  38,775
  53,308
  70,875
  91,704
  115,971
  143,803
  175,298
  210,451
  249,276
  291,737
  337,773
  387,313
  440,273
  496,572
  556,135
  618,896
  684,805
  753,827
  825,949
  901,177
  979,540
  1,061,086
  1,145,888
  1,234,036
  1,325,645
  1,420,847
EBITDA, $m
  2,332
  6,465
  12,393
  20,317
  30,603
  43,610
  59,672
  79,084
  102,097
  128,905
  159,650
  194,417
  233,244
  276,125
  323,019
  373,862
  428,572
  487,058
  549,232
  615,008
  684,316
  757,098
  833,318
  912,961
  996,033
  1,082,566
  1,172,614
  1,266,257
  1,363,594
  1,464,753
  1,569,878
Interest expense (income), $m
  199
  233
  495
  853
  1,329
  1,944
  2,719
  3,674
  4,826
  6,190
  7,777
  9,596
  11,651
  13,946
  16,478
  19,247
  22,249
  25,477
  28,928
  32,596
  36,477
  40,565
  44,857
  49,352
  54,048
  58,947
  64,049
  69,358
  74,879
  80,617
  86,581
Earnings before tax, $m
  1,277
  4,959
  10,051
  16,854
  25,680
  36,831
  50,588
  67,201
  86,878
  109,781
  136,026
  165,702
  198,800
  235,330
  275,258
  318,526
  365,064
  414,795
  467,644
  523,539
  582,420
  644,240
  708,970
  776,597
  847,129
  920,593
  997,037
  1,076,529
  1,159,157
  1,245,028
  1,334,267
Tax expense, $m
  427
  1,339
  2,714
  4,551
  6,934
  9,944
  13,659
  18,144
  23,457
  29,641
  36,727
  44,740
  53,676
  63,539
  74,320
  86,002
  98,567
  111,995
  126,264
  141,355
  157,253
  173,945
  191,422
  209,681
  228,725
  248,560
  269,200
  290,663
  312,972
  336,158
  360,252
Net income, $m
  734
  3,620
  7,337
  12,304
  18,747
  26,887
  36,929
  49,057
  63,421
  80,140
  99,299
  120,963
  145,124
  171,791
  200,938
  232,524
  266,497
  302,801
  341,380
  382,183
  425,166
  470,295
  517,548
  566,916
  618,404
  672,033
  727,837
  785,866
  846,185
  908,870
  974,015

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,295
  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
  20,398
  25,711
  37,479
  53,105
  73,298
  98,747
  130,099
  167,924
  212,704
  264,817
  324,534
  392,021
  467,351
  550,512
  641,427
  739,970
  845,985
  959,297
  1,079,735
  1,207,136
  1,341,362
  1,482,304
  1,629,893
  1,784,097
  1,944,932
  2,112,457
  2,286,778
  2,468,048
  2,656,464
  2,852,265
  3,055,737
Adjusted assets (=assets-cash), $m
  17,103
  25,711
  37,479
  53,105
  73,298
  98,747
  130,099
  167,924
  212,704
  264,817
  324,534
  392,021
  467,351
  550,512
  641,427
  739,970
  845,985
  959,297
  1,079,735
  1,207,136
  1,341,362
  1,482,304
  1,629,893
  1,784,097
  1,944,932
  2,112,457
  2,286,778
  2,468,048
  2,656,464
  2,852,265
  3,055,737
Revenue / Adjusted assets
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
  1.437
Average production assets, $m
  11,003
  16,552
  24,128
  34,188
  47,187
  63,571
  83,755
  108,106
  136,934
  170,483
  208,927
  252,374
  300,869
  354,406
  412,935
  476,375
  544,625
  617,573
  695,107
  777,125
  863,536
  954,272
  1,049,286
  1,148,559
  1,252,100
  1,359,949
  1,472,173
  1,588,870
  1,710,168
  1,836,220
  1,967,210
Working capital, $m
  3,860
  1,552
  2,262
  3,205
  4,424
  5,960
  7,852
  10,135
  12,838
  15,983
  19,587
  23,660
  28,206
  33,226
  38,713
  44,660
  51,059
  57,897
  65,166
  72,855
  80,957
  89,463
  98,371
  107,677
  117,384
  127,495
  138,016
  148,957
  160,328
  172,146
  184,426
Total debt, $m
  6,933
  13,752
  23,707
  36,927
  54,010
  75,540
  102,064
  134,064
  171,948
  216,036
  266,556
  323,650
  387,379
  457,733
  534,647
  618,015
  707,703
  803,566
  905,456
  1,013,237
  1,126,792
  1,246,029
  1,370,889
  1,501,346
  1,637,412
  1,779,138
  1,926,614
  2,079,969
  2,239,368
  2,405,016
  2,577,153
Total liabilities, $m
  14,933
  21,752
  31,707
  44,927
  62,010
  83,540
  110,064
  142,064
  179,948
  224,036
  274,556
  331,650
  395,379
  465,733
  542,647
  626,015
  715,703
  811,566
  913,456
  1,021,237
  1,134,792
  1,254,029
  1,378,889
  1,509,346
  1,645,412
  1,787,138
  1,934,614
  2,087,969
  2,247,368
  2,413,016
  2,585,153
Total equity, $m
  5,465
  3,959
  5,772
  8,178
  11,288
  15,207
  20,035
  25,860
  32,756
  40,782
  49,978
  60,371
  71,972
  84,779
  98,780
  113,955
  130,282
  147,732
  166,279
  185,899
  206,570
  228,275
  251,003
  274,751
  299,519
  325,318
  352,164
  380,079
  409,095
  439,249
  470,583
Total liabilities and equity, $m
  20,398
  25,711
  37,479
  53,105
  73,298
  98,747
  130,099
  167,924
  212,704
  264,818
  324,534
  392,021
  467,351
  550,512
  641,427
  739,970
  845,985
  959,298
  1,079,735
  1,207,136
  1,341,362
  1,482,304
  1,629,892
  1,784,097
  1,944,931
  2,112,456
  2,286,778
  2,468,048
  2,656,463
  2,852,265
  3,055,736
Debt-to-equity ratio
  1.269
  3.470
  4.110
  4.520
  4.780
  4.970
  5.090
  5.180
  5.250
  5.300
  5.330
  5.360
  5.380
  5.400
  5.410
  5.420
  5.430
  5.440
  5.450
  5.450
  5.450
  5.460
  5.460
  5.460
  5.470
  5.470
  5.470
  5.470
  5.470
  5.480
  5.480
Adjusted equity ratio
  0.127
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  734
  3,620
  7,337
  12,304
  18,747
  26,887
  36,929
  49,057
  63,421
  80,140
  99,299
  120,963
  145,124
  171,791
  200,938
  232,524
  266,497
  302,801
  341,380
  382,183
  425,166
  470,295
  517,548
  566,916
  618,404
  672,033
  727,837
  785,866
  846,185
  908,870
  974,015
Depreciation, amort., depletion, $m
  851
  1,273
  1,847
  2,609
  3,594
  4,835
  6,364
  8,209
  10,393
  12,934
  15,847
  19,119
  22,793
  26,849
  31,283
  36,089
  41,259
  46,786
  52,660
  58,873
  65,419
  72,293
  79,491
  87,012
  94,856
  103,026
  111,528
  120,369
  129,558
  139,108
  149,031
Funds from operations, $m
  1,372
  4,893
  9,184
  14,913
  22,340
  31,722
  43,294
  57,266
  73,814
  93,074
  115,146
  140,082
  167,917
  198,640
  232,221
  268,613
  307,756
  349,586
  394,040
  441,056
  490,586
  542,589
  597,039
  653,928
  713,260
  775,059
  839,365
  906,235
  975,743
  1,047,978
  1,123,046
Change in working capital, $m
  68
  519
  710
  943
  1,219
  1,536
  1,892
  2,283
  2,703
  3,145
  3,604
  4,073
  4,546
  5,019
  5,487
  5,947
  6,398
  6,839
  7,269
  7,689
  8,101
  8,506
  8,908
  9,307
  9,707
  10,111
  10,521
  10,940
  11,372
  11,817
  12,280
Cash from operations, $m
  1,304
  4,374
  8,474
  13,970
  21,122
  30,186
  41,401
  54,983
  71,111
  89,929
  111,542
  136,009
  163,371
  193,621
  226,734
  262,666
  301,358
  342,748
  386,771
  433,367
  482,485
  534,082
  588,132
  644,621
  703,553
  764,949
  828,844
  895,295
  964,371
  1,036,161
  1,110,766
Maintenance CAPEX, $m
  0
  -834
  -1,254
  -1,828
  -2,590
  -3,575
  -4,816
  -6,345
  -8,190
  -10,374
  -12,915
  -15,828
  -19,119
  -22,793
  -26,849
  -31,283
  -36,089
  -41,259
  -46,786
  -52,660
  -58,873
  -65,419
  -72,293
  -79,491
  -87,012
  -94,856
  -103,026
  -111,528
  -120,369
  -129,558
  -139,108
New CAPEX, $m
  -894
  -5,550
  -7,576
  -10,060
  -12,999
  -16,384
  -20,183
  -24,351
  -28,828
  -33,549
  -38,444
  -43,447
  -48,495
  -53,537
  -58,529
  -63,440
  -68,250
  -72,948
  -77,535
  -82,018
  -86,411
  -90,735
  -95,014
  -99,273
  -103,542
  -107,849
  -112,224
  -116,697
  -121,297
  -126,052
  -130,990
Cash from investing activities, $m
  -1,317
  -6,384
  -8,830
  -11,888
  -15,589
  -19,959
  -24,999
  -30,696
  -37,018
  -43,923
  -51,359
  -59,275
  -67,614
  -76,330
  -85,378
  -94,723
  -104,339
  -114,207
  -124,321
  -134,678
  -145,284
  -156,154
  -167,307
  -178,764
  -190,554
  -202,705
  -215,250
  -228,225
  -241,666
  -255,610
  -270,098
Free cash flow, $m
  -13
  -2,009
  -356
  2,082
  5,532
  10,227
  16,402
  24,287
  34,093
  46,006
  60,182
  76,734
  95,756
  117,291
  141,356
  167,943
  197,019
  228,540
  262,450
  298,690
  337,200
  377,927
  420,825
  465,857
  513,000
  562,244
  613,594
  667,070
  722,705
  780,550
  840,668
Issuance/(repayment) of debt, $m
  2,779
  7,284
  9,956
  13,220
  17,083
  21,531
  26,523
  32,000
  37,884
  44,088
  50,520
  57,094
  63,729
  70,354
  76,914
  83,368
  89,688
  95,863
  101,890
  107,781
  113,555
  119,237
  124,860
  130,457
  136,066
  141,726
  147,476
  153,354
  159,399
  165,648
  172,137
Issuance/(repurchase) of shares, $m
  116
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,615
  7,284
  9,956
  13,220
  17,083
  21,531
  26,523
  32,000
  37,884
  44,088
  50,520
  57,094
  63,729
  70,354
  76,914
  83,368
  89,688
  95,863
  101,890
  107,781
  113,555
  119,237
  124,860
  130,457
  136,066
  141,726
  147,476
  153,354
  159,399
  165,648
  172,137
Total cash flow (excl. dividends), $m
  2,602
  5,274
  9,600
  15,302
  22,615
  31,757
  42,925
  56,287
  71,977
  90,094
  110,702
  133,828
  159,485
  187,645
  218,271
  251,311
  286,707
  324,403
  364,340
  406,471
  450,755
  497,165
  545,685
  596,314
  649,066
  703,970
  761,070
  820,424
  882,105
  946,198
  1,012,805
Retained Cash Flow (-), $m
  -252
  -1,324
  -1,812
  -2,406
  -3,110
  -3,919
  -4,828
  -5,825
  -6,896
  -8,025
  -9,196
  -10,393
  -11,601
  -12,807
  -14,001
  -15,176
  -16,326
  -17,450
  -18,547
  -19,620
  -20,671
  -21,705
  -22,729
  -23,747
  -24,769
  -25,799
  -26,846
  -27,916
  -29,016
  -30,153
  -31,335
Prev. year cash balance distribution, $m
 
  2,830
  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
 
  6,780
  7,787
  12,895
  19,505
  27,838
  38,097
  50,462
  65,081
  82,068
  101,506
  123,435
  147,884
  174,838
  204,270
  236,135
  270,381
  306,952
  345,793
  386,851
  430,085
  475,460
  522,956
  572,566
  624,297
  678,171
  734,224
  792,508
  853,089
  916,045
  981,470
Discount rate, %
 
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
 
  6,420
  6,947
  10,774
  15,172
  20,028
  25,177
  30,407
  35,476
  40,130
  44,126
  47,251
  49,345
  50,306
  50,102
  48,773
  46,423
  43,212
  39,337
  35,018
  30,477
  25,923
  21,542
  17,478
  13,838
  10,684
  8,036
  5,885
  4,191
  2,900
  1,947
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Andeavor, formerly Tesoro Corporation, is an independent petroleum refining, logistics and marketing company. he Company operates through three segments. The Refining operating segment refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas and petroleum coke for sale in bulk markets to a range of customers within its markets. The TLLP segment comprises Tesoro Logistics LP's (TLLP) assets and operations, and includes certain crude oil and natural gas gathering assets, natural gas and natural gas liquids (NGLs) processing assets, and crude oil and refined products terminaling, and transportation. The marketing segment sells transportation fuels through branded and unbranded channels.

FINANCIAL RATIOS  of  Andeavor (ANDV)

Valuation Ratios
P/E Ratio 18.8
Price to Sales 0.6
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow 33.7
Growth Rates
Sales Growth Rate -14.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -13.2%
Cap. Spend. - 3 Yr. Gr. Rate 9.4%
Financial Strength
Quick Ratio 7
Current Ratio 0.2
LT Debt to Equity 118.4%
Total Debt to Equity 126.9%
Interest Coverage 7
Management Effectiveness
Return On Assets 4.7%
Ret/ On Assets - 3 Yr. Avg. 7%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 11.6%
Return On Equity 13.7%
Return On Equity - 3 Yr. Avg. 21.6%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 19.8%
Gross Margin - 3 Yr. Avg. 18.9%
EBITDA Margin 9.5%
EBITDA Margin - 3 Yr. Avg. 9.1%
Operating Margin 6%
Oper. Margin - 3 Yr. Avg. 6.6%
Pre-Tax Margin 5.2%
Pre-Tax Margin - 3 Yr. Avg. 6%
Net Profit Margin 3%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 33.4%
Eff/ Tax Rate - 3 Yr. Avg. 35.5%
Payout Ratio 33.9%

ANDV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANDV stock intrinsic value calculation we used $24582 million for the last fiscal year's total revenue generated by Andeavor. The default revenue input number comes from 2016 income statement of Andeavor. 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 ANDV stock valuation model: a) initial revenue growth rate of 50.3% 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 5.6%, whose default value for ANDV is calculated based on our internal credit rating of Andeavor, 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 Andeavor.
    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 ANDV stock the variable cost ratio is equal to 67.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6695 million in the base year in the intrinsic value calculation for ANDV 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 3.6% for Andeavor.

Corporate tax rate of 27% is the nominal tax rate for Andeavor. 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 ANDV 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 ANDV are equal to 44.8%.

Life of production assets of 13.2 years is the average useful life of capital assets used in Andeavor 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 ANDV is equal to 4.2%. 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 - $5465 million for Andeavor - 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 157.425 million for Andeavor 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 Andeavor at the current share price and the inputted number of shares is $18.6 billion.

COMPANY NEWS

▶ These Refining and Marketing Stocks Rose This Week   [Jan-19-18 07:55AM  Market Realist]
▶ Estimating Marathon Petroleums Stock Price ahead of Earnings   [Jan-18-18 10:32AM  Market Realist]
▶ MPCs Refining Earnings Outlook for 4Q17   [Jan-17-18 05:00PM  Market Realist]
▶ MPC, ANDV, VLO, PSX: A Look at Refiners Valuations   [Jan-12-18 09:02AM  Market Realist]
▶ Will Valeros Refining Margins Surge in 4Q17?   [07:30AM  Market Realist]
▶ Refiners Valuations for MPC, ANDV, VLO, and PSX   [Jan-10-18 10:31AM  Market Realist]
▶ Vancouver officials deal blow to proposed oil terminal   [Jan-09-18 04:26PM  Associated Press]
▶ Oil Refinery Stocks Are Up 30%   [Jan-08-18 08:15PM  Motley Fool]
▶ Analysts' Top Oil & Gas Stock Picks For 2018   [Dec-28-17 04:56PM  Forbes]
▶ A Look at Marathon Petroleums Cash Flow Position   [Dec-25-17 07:30AM  Market Realist]
▶ Do Marathon Petroleums Valuations Stand above Peer Averages?   [Dec-22-17 09:00AM  Market Realist]
▶ Marathon Petroleums Moving Averages: What Do They Indicate?   [Dec-20-17 04:40PM  Market Realist]
▶ ETFs with exposure to Andeavor : December 18, 2017   [Dec-18-17 02:30PM  Capital Cube]
▶ ETFs with exposure to Andeavor : December 7, 2017   [Dec-07-17 12:53PM  Capital Cube]
▶ Washington state panel calls for oil terminal denial   [Nov-28-17 07:04PM  Associated Press]
▶ ETFs with exposure to Andeavor : November 27, 2017   [Nov-27-17 12:00PM  Capital Cube]
▶ Washington state panel outlines risk of oil-by-rail terminal   [Nov-23-17 12:17AM  Associated Press]
▶ How Refining Stocks Moving Averages Are Trending in 4Q17   [Nov-20-17 07:30AM  Market Realist]
▶ Andeavor Value Analysis (NYSE:ANDV) : November 17, 2017   [Nov-17-17 01:34PM  Capital Cube]
▶ This Institution Added a Major Position in ANDX in 3Q17   [Nov-16-17 03:16PM  Market Realist]
▶ How Andeavor Stock Performed ahead of 3Q17 Earnings   [Nov-10-17 10:40AM  Market Realist]
▶ Andeavor Logistics LP Reports Third Quarter 2017 Results   [Nov-08-17 05:02PM  GlobeNewswire]
▶ Andeavor Reports Third Quarter 2017 Results   [05:01PM  GlobeNewswire]
▶ ETFs with exposure to Andeavor : November 2, 2017   [Nov-02-17 11:43AM  Capital Cube]
▶ Will Andeavors 3Q17 Earnings Show a Surge?   [Oct-26-17 01:23PM  Market Realist]
▶ Backers of oil terminal pour money into Washington port race   [Oct-19-17 08:10PM  Associated Press]
▶ Andeavor makes first fuel shipment to Mexico   [Oct-18-17 02:10PM  American City Business Journals]
▶ Andeavor to Release Third Quarter 2017 Earnings   [Oct-05-17 05:01PM  GlobeNewswire]
▶ Tesoro Hits 80-Plus Relative Strength Rating Benchmark   [Sep-20-17 03:00AM  Investor's Business Daily]
▶ How Phillips 66s Capex Is Shaping Its Future Growth Path   [Sep-18-17 09:07AM  Market Realist]
▶ Understanding Phillips 66s Cash Flow   [07:36AM  Market Realist]
▶ How Phillips 66s Leverage Curve Is Trending   [Sep-15-17 10:37AM  Market Realist]
▶ Institutional Ownership in Phillips 66: Whos Buying PSX   [Sep-14-17 10:38AM  Market Realist]
▶ Where Phillips 66s Analysts Are Leaning Now   [08:07AM  Market Realist]
▶ Behind Phillips 66s Moving Averages in 3Q17   [Sep-13-17 01:36PM  Market Realist]
▶ Aftermath of hurricanes sends Andeavor, Valero stocks to near two-year highs   [Sep-12-17 11:49AM  American City Business Journals]
▶ ETFs with exposure to Andeavor : September 12, 2017   [Sep-11-17 08:28PM  Capital Cube]
▶ MPCs Segmental Earnings Trend in 2Q17   [10:36AM  Market Realist]
▶ How Is Marathon Petroleums Leverage Trending?   [10:36AM  Market Realist]
▶ [$$] Maybe The Obama Era Really Is Ending   [Sep-07-17 02:49PM  The Wall Street Journal]
▶ Marathon Petroleums Moving Averages: What Do They Indicate?   [Sep-06-17 02:36PM  Market Realist]
▶ [$$] Underwater: Houston's Refiners, Not the Stocks   [Sep-01-17 11:24PM  Barrons.com]
▶ Andeavor opens first ARCO gas station in Mexico   [Aug-30-17 03:30PM  American City Business Journals]
Financial statements of ANDV
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