Intrinsic value of ENI ADR - E

Previous Close

$33.66

  Intrinsic Value

$888.21

stock screener

  Rating & Target

str. buy

+999%

Previous close

$33.66

 
Intrinsic value

$888.21

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of E 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 1.2

 

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, %
  42.80
  39.02
  35.62
  32.56
  29.80
  27.32
  25.09
  23.08
  21.27
  19.64
  18.18
  16.86
  15.68
  14.61
  13.65
  12.78
  12.00
  11.30
  10.67
  10.11
  9.60
  9.14
  8.72
  8.35
  8.02
  7.71
  7.44
  7.20
  6.98
  6.78
Revenue, $m
  121,675
  169,152
  229,401
  304,085
  394,705
  502,540
  628,619
  773,702
  938,282
  1,122,603
  1,326,692
  1,550,400
  1,793,438
  2,055,428
  2,335,941
  2,634,537
  2,950,797
  3,284,355
  3,634,913
  4,002,265
  4,386,306
  4,787,041
  5,204,587
  5,639,180
  6,091,170
  6,561,022
  7,049,312
  7,556,726
  8,084,054
  8,632,187
Variable operating expenses, $m
  86,482
  120,091
  162,739
  215,607
  279,754
  356,089
  445,338
  548,039
  664,541
  795,018
  939,137
  1,097,495
  1,269,537
  1,454,994
  1,653,563
  1,864,933
  2,088,807
  2,324,926
  2,573,078
  2,833,119
  3,104,974
  3,388,645
  3,684,218
  3,991,857
  4,311,811
  4,644,409
  4,990,060
  5,349,247
  5,722,531
  6,110,544
Fixed operating expenses, $m
  15,567
  15,910
  16,260
  16,617
  16,983
  17,357
  17,738
  18,129
  18,527
  18,935
  19,352
  19,777
  20,212
  20,657
  21,112
  21,576
  22,051
  22,536
  23,032
  23,538
  24,056
  24,585
  25,126
  25,679
  26,244
  26,821
  27,411
  28,014
  28,631
  29,261
Total operating expenses, $m
  102,049
  136,001
  178,999
  232,224
  296,737
  373,446
  463,076
  566,168
  683,068
  813,953
  958,489
  1,117,272
  1,289,749
  1,475,651
  1,674,675
  1,886,509
  2,110,858
  2,347,462
  2,596,110
  2,856,657
  3,129,030
  3,413,230
  3,709,344
  4,017,536
  4,338,055
  4,671,230
  5,017,471
  5,377,261
  5,751,162
  6,139,805
Operating income, $m
  19,626
  33,152
  50,402
  71,861
  97,967
  129,095
  165,543
  207,535
  255,213
  308,650
  368,203
  433,127
  503,688
  579,777
  661,266
  748,028
  839,939
  936,893
  1,038,803
  1,145,608
  1,257,276
  1,373,810
  1,495,243
  1,621,644
  1,753,115
  1,889,791
  2,031,841
  2,179,464
  2,332,892
  2,492,383
EBITDA, $m
  32,462
  50,861
  74,293
  103,416
  138,821
  181,013
  230,400
  287,279
  351,845
  424,195
  504,340
  592,219
  687,720
  790,691
  900,965
  1,018,367
  1,142,731
  1,273,913
  1,411,795
  1,556,295
  1,707,371
  1,865,026
  2,029,305
  2,200,301
  2,378,152
  2,563,042
  2,755,197
  2,954,888
  3,162,426
  3,378,163
Interest expense (income), $m
  823
  7,178
  15,487
  26,307
  40,038
  57,059
  77,711
  102,287
  131,021
  164,086
  201,594
  243,601
  290,114
  341,098
  396,487
  456,195
  520,125
  588,176
  660,252
  736,271
  816,164
  899,885
  987,409
  1,078,738
  1,173,898
  1,272,943
  1,375,953
  1,483,033
  1,594,316
  1,709,957
  1,830,136
Earnings before tax, $m
  12,448
  17,665
  24,095
  31,823
  40,908
  51,383
  63,256
  76,514
  91,127
  107,055
  124,602
  143,013
  162,591
  183,290
  205,071
  227,903
  251,764
  276,641
  302,532
  329,443
  357,391
  386,401
  416,506
  447,747
  480,172
  513,839
  548,808
  585,148
  622,935
  662,247
Tax expense, $m
  3,361
  4,770
  6,506
  8,592
  11,045
  13,874
  17,079
  20,659
  24,604
  28,905
  33,642
  38,613
  43,900
  49,488
  55,369
  61,534
  67,976
  74,693
  81,684
  88,950
  96,496
  104,328
  112,457
  120,892
  129,647
  138,736
  148,178
  157,990
  168,192
  178,807
Net income, $m
  9,087
  12,896
  17,589
  23,231
  29,863
  37,510
  46,177
  55,855
  66,523
  78,150
  90,959
  104,399
  118,691
  133,802
  149,702
  166,369
  183,788
  201,948
  220,848
  240,494
  260,896
  282,073
  304,049
  326,855
  350,526
  375,102
  400,630
  427,158
  454,742
  483,440

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
  196,885
  273,709
  371,199
  492,048
  638,681
  813,171
  1,017,184
  1,251,946
  1,518,255
  1,816,509
  2,146,751
  2,508,737
  2,902,003
  3,325,935
  3,779,839
  4,263,004
  4,774,753
  5,314,490
  5,881,736
  6,476,157
  7,097,583
  7,746,021
  8,421,662
  9,124,887
  9,856,263
  10,616,541
  11,406,654
  12,227,712
  13,080,993
  13,967,940
Adjusted assets (=assets-cash), $m
  196,885
  273,709
  371,199
  492,048
  638,681
  813,171
  1,017,184
  1,251,946
  1,518,255
  1,816,509
  2,146,751
  2,508,737
  2,902,003
  3,325,935
  3,779,839
  4,263,004
  4,774,753
  5,314,490
  5,881,736
  6,476,157
  7,097,583
  7,746,021
  8,421,662
  9,124,887
  9,856,263
  10,616,541
  11,406,654
  12,227,712
  13,080,993
  13,967,940
Revenue / Adjusted assets
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
Average production assets, $m
  109,872
  152,745
  207,149
  274,589
  356,418
  453,794
  567,643
  698,653
  847,269
  1,013,710
  1,198,003
  1,400,011
  1,619,474
  1,856,051
  2,109,354
  2,378,987
  2,664,570
  2,965,772
  3,282,326
  3,614,045
  3,960,835
  4,322,698
  4,699,742
  5,092,180
  5,500,327
  5,924,603
  6,365,529
  6,823,724
  7,299,900
  7,794,865
Working capital, $m
  4,502
  6,259
  8,488
  11,251
  14,604
  18,594
  23,259
  28,627
  34,716
  41,536
  49,088
  57,365
  66,357
  76,051
  86,430
  97,478
  109,179
  121,521
  134,492
  148,084
  162,293
  177,121
  192,570
  208,650
  225,373
  242,758
  260,825
  279,599
  299,110
  319,391
Total debt, $m
  63,996
  108,708
  165,447
  235,781
  321,121
  422,675
  541,410
  678,042
  833,034
  1,006,618
  1,198,819
  1,409,494
  1,638,375
  1,885,103
  2,149,276
  2,430,478
  2,728,316
  3,042,442
  3,372,580
  3,718,533
  4,080,203
  4,457,594
  4,850,817
  5,260,094
  5,685,754
  6,128,236
  6,588,082
  7,065,938
  7,562,547
  8,078,751
Total liabilities, $m
  114,587
  159,299
  216,038
  286,372
  371,712
  473,266
  592,001
  728,632
  883,625
  1,057,208
  1,249,409
  1,460,085
  1,688,966
  1,935,694
  2,199,866
  2,481,068
  2,778,906
  3,093,033
  3,423,170
  3,769,123
  4,130,793
  4,508,184
  4,901,408
  5,310,684
  5,736,345
  6,178,827
  6,638,673
  7,116,529
  7,613,138
  8,129,341
Total equity, $m
  82,298
  114,411
  155,161
  205,676
  266,968
  339,906
  425,183
  523,313
  634,631
  759,301
  897,342
  1,048,652
  1,213,037
  1,390,241
  1,579,973
  1,781,936
  1,995,847
  2,221,457
  2,458,566
  2,707,034
  2,966,790
  3,237,837
  3,520,255
  3,814,203
  4,119,918
  4,437,714
  4,767,982
  5,111,184
  5,467,855
  5,838,599
Total liabilities and equity, $m
  196,885
  273,710
  371,199
  492,048
  638,680
  813,172
  1,017,184
  1,251,945
  1,518,256
  1,816,509
  2,146,751
  2,508,737
  2,902,003
  3,325,935
  3,779,839
  4,263,004
  4,774,753
  5,314,490
  5,881,736
  6,476,157
  7,097,583
  7,746,021
  8,421,663
  9,124,887
  9,856,263
  10,616,541
  11,406,655
  12,227,713
  13,080,993
  13,967,940
Debt-to-equity ratio
  0.780
  0.950
  1.070
  1.150
  1.200
  1.240
  1.270
  1.300
  1.310
  1.330
  1.340
  1.340
  1.350
  1.360
  1.360
  1.360
  1.370
  1.370
  1.370
  1.370
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
  1.380
Adjusted equity ratio
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418
  0.418

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9,087
  12,896
  17,589
  23,231
  29,863
  37,510
  46,177
  55,855
  66,523
  78,150
  90,959
  104,399
  118,691
  133,802
  149,702
  166,369
  183,788
  201,948
  220,848
  240,494
  260,896
  282,073
  304,049
  326,855
  350,526
  375,102
  400,630
  427,158
  454,742
  483,440
Depreciation, amort., depletion, $m
  12,837
  17,708
  23,891
  31,554
  40,853
  51,919
  64,856
  79,744
  96,632
  115,545
  136,137
  159,092
  184,031
  210,915
  239,699
  270,339
  302,792
  337,020
  372,992
  410,687
  450,095
  491,216
  534,062
  578,657
  625,037
  673,250
  723,356
  775,423
  829,534
  885,780
Funds from operations, $m
  21,924
  30,604
  41,480
  54,785
  70,716
  89,429
  111,033
  135,599
  163,155
  193,696
  227,096
  263,492
  302,722
  344,716
  389,401
  436,708
  486,580
  538,967
  593,840
  651,181
  710,991
  773,288
  838,111
  905,512
  975,563
  1,048,353
  1,123,985
  1,202,582
  1,284,276
  1,369,220
Change in working capital, $m
  1,349
  1,757
  2,229
  2,763
  3,353
  3,990
  4,665
  5,368
  6,089
  6,820
  7,551
  8,277
  8,992
  9,694
  10,379
  11,048
  11,702
  12,342
  12,971
  13,592
  14,210
  14,827
  15,449
  16,080
  16,724
  17,385
  18,067
  18,774
  19,511
  20,281
Cash from operations, $m
  20,574
  28,847
  39,251
  52,022
  67,363
  85,439
  106,368
  130,231
  157,065
  186,876
  219,545
  255,214
  293,730
  335,023
  379,022
  425,660
  474,878
  526,626
  580,869
  637,589
  696,781
  758,461
  822,662
  889,432
  958,839
  1,030,968
  1,105,919
  1,183,807
  1,264,765
  1,348,939
Maintenance CAPEX, $m
  -8,739
  -12,485
  -17,357
  -23,540
  -31,203
  -40,502
  -51,567
  -64,505
  -79,392
  -96,281
  -115,194
  -136,137
  -159,092
  -184,031
  -210,915
  -239,699
  -270,339
  -302,792
  -337,020
  -372,992
  -410,687
  -450,095
  -491,216
  -534,062
  -578,657
  -625,037
  -673,250
  -723,356
  -775,423
  -829,534
New CAPEX, $m
  -32,965
  -42,872
  -54,405
  -67,440
  -81,829
  -97,375
  -113,850
  -131,010
  -148,615
  -166,442
  -184,293
  -202,008
  -219,463
  -236,577
  -253,303
  -269,632
  -285,583
  -301,202
  -316,554
  -331,719
  -346,789
  -361,863
  -377,044
  -392,437
  -408,147
  -424,276
  -440,926
  -458,195
  -476,177
  -494,965
Cash from investing activities, $m
  -41,704
  -55,357
  -71,762
  -90,980
  -113,032
  -137,877
  -165,417
  -195,515
  -228,007
  -262,723
  -299,487
  -338,145
  -378,555
  -420,608
  -464,218
  -509,331
  -555,922
  -603,994
  -653,574
  -704,711
  -757,476
  -811,958
  -868,260
  -926,499
  -986,804
  -1,049,313
  -1,114,176
  -1,181,551
  -1,251,600
  -1,324,499
Free cash flow, $m
  -21,130
  -26,510
  -32,511
  -38,958
  -45,669
  -52,439
  -59,049
  -65,284
  -70,943
  -75,846
  -79,943
  -82,930
  -84,825
  -85,585
  -85,196
  -83,671
  -81,045
  -77,368
  -72,704
  -67,122
  -60,695
  -53,497
  -45,599
  -37,067
  -27,964
  -18,345
  -8,258
  2,257
  13,165
  24,440
Issuance/(repayment) of debt, $m
  34,336
  44,712
  56,739
  70,334
  85,340
  101,554
  118,735
  136,632
  154,992
  173,584
  192,201
  210,676
  228,881
  246,728
  264,172
  281,202
  297,838
  314,127
  330,137
  345,953
  361,670
  377,391
  393,223
  409,277
  425,660
  442,482
  459,846
  477,856
  496,609
  516,203
Issuance/(repurchase) of shares, $m
  15,493
  19,217
  23,162
  27,284
  31,429
  35,427
  39,100
  42,276
  44,795
  46,520
  47,082
  46,911
  45,694
  43,402
  40,030
  35,594
  30,123
  23,662
  16,261
  7,974
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  49,829
  63,929
  79,901
  97,618
  116,769
  136,981
  157,835
  178,908
  199,787
  220,104
  239,283
  257,587
  274,575
  290,130
  304,202
  316,796
  327,961
  337,789
  346,398
  353,927
  361,670
  377,391
  393,223
  409,277
  425,660
  442,482
  459,846
  477,856
  496,609
  516,203
Total cash flow (excl. dividends), $m
  28,699
  37,419
  47,390
  58,660
  71,101
  84,542
  98,786
  113,623
  128,844
  144,257
  159,340
  174,657
  189,749
  204,545
  219,007
  233,125
  246,916
  260,420
  273,694
  286,805
  300,975
  323,894
  347,625
  372,210
  397,696
  424,137
  451,588
  480,113
  509,775
  540,644
Retained Cash Flow (-), $m
  -24,580
  -32,113
  -40,751
  -50,515
  -61,293
  -72,937
  -85,277
  -98,131
  -111,317
  -124,670
  -138,041
  -151,310
  -164,385
  -177,204
  -189,732
  -201,963
  -213,911
  -225,610
  -237,109
  -248,468
  -259,756
  -271,047
  -282,418
  -293,948
  -305,715
  -317,796
  -330,268
  -343,202
  -356,671
  -370,744
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
  4,119
  5,306
  6,639
  8,145
  9,808
  11,605
  13,509
  15,492
  17,527
  19,587
  21,299
  23,346
  25,364
  27,342
  29,275
  31,162
  33,005
  34,810
  36,585
  38,337
  41,219
  52,847
  65,207
  78,262
  91,981
  106,340
  121,321
  136,911
  153,103
  169,900
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,949
  4,857
  5,778
  6,707
  7,603
  8,422
  9,126
  9,683
  10,068
  10,269
  10,115
  9,963
  9,644
  9,179
  8,595
  7,919
  7,181
  6,411
  5,633
  4,872
  4,263
  4,385
  4,274
  3,986
  3,578
  3,102
  2,604
  2,118
  1,671
  1,279
Current shareholders' claim on cash, %
  72.3
  54.2
  42.0
  33.6
  27.6
  23.2
  19.9
  17.4
  15.5
  14.1
  12.9
  12.0
  11.3
  10.8
  10.3
  10.0
  9.8
  9.6
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5

Eni SpA (Eni) is an Italy-based company engaged in the exploration, development and production of hydrocarbons, in the supply and marketing of gas, liquefied natural gas (LNG) and power, in the refining and marketing of petroleum products, in the production and marketing of basic petrochemicals, plastics and elastomers and in commodity trading. The Company's segments include Exploration & Production, Gas & Power, and Refining & Marketing. Its Exploration & Production segment engages in oil and natural gas exploration and field development and production, as well as LNG operations in over 40 countries, including Italy, Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Algeria, Australia, Venezuela, Iraq, Ghana and Mozambique. Its Gas & Power segment engages in supply, trading and marketing of gas, LNG and electricity, international gas transport activities and commodity trading and derivatives.

FINANCIAL RATIOS  of  ENI ADR (E)

Valuation Ratios
P/E Ratio -78.5
Price to Sales 2.1
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 13.4
Price to Free Cash Flow -184.2
Growth Rates
Sales Growth Rate -22.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.8%
Cap. Spend. - 3 Yr. Gr. Rate -6.4%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 38.8%
Total Debt to Equity 51.4%
Interest Coverage 2
Management Effectiveness
Return On Assets -1.8%
Ret/ On Assets - 3 Yr. Avg. -2%
Return On Total Capital -1.8%
Ret/ On T. Cap. - 3 Yr. Avg. -3.5%
Return On Equity -2.7%
Return On Equity - 3 Yr. Avg. -5.1%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 48.7%
Gross Margin - 3 Yr. Avg. 42.8%
EBITDA Margin 16.6%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin 3.6%
Oper. Margin - 3 Yr. Avg. 2.9%
Pre-Tax Margin 1.6%
Pre-Tax Margin - 3 Yr. Avg. 1.4%
Net Profit Margin -2.6%
Net Profit Margin - 3 Yr. Avg. -4.5%
Effective Tax Rate 217.1%
Eff/ Tax Rate - 3 Yr. Avg. 74.1%
Payout Ratio -196.8%

E stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the E stock intrinsic value calculation we used $85206.482593 million for the last fiscal year's total revenue generated by ENI ADR. The default revenue input number comes from 0001 income statement of ENI 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 E stock valuation model: a) initial revenue growth rate of 42.8% 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 4.3%, whose default value for E is calculated based on our internal credit rating of ENI 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 ENI 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 E stock the variable cost ratio is equal to 71.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $15232 million in the base year in the intrinsic value calculation for E 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 24.2% for ENI ADR.

Corporate tax rate of 27% is the nominal tax rate for ENI 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 E 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 E are equal to 90.3%.

Life of production assets of 8.8 years is the average useful life of capital assets used in ENI 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 E is equal to 3.7%. 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 - $57717.8871549 million for ENI 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 36.659 million for ENI 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 ENI ADR at the current share price and the inputted number of shares is $1.2 billion.

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COMPANY NEWS

▶ Why Eni (E) Isn't Done Growing Earnings Yet   [Nov-12-18 09:00AM  Zacks]
▶ [$$] Mays moment   [02:29AM  Financial Times]
▶ [$$] Oil groups budget just 1% of spending to green projects   [Nov-11-18 12:50AM  Financial Times]
▶ [$$] European energy sector in worst quarter since 2015   [Nov-08-18 10:25PM  Financial Times]
▶ Value Investors Are Piling Into This Stock   [09:35AM  Insider Monkey]
▶ Is Shale The Future For Big Oil?   [Nov-06-18 06:00PM  Oilprice.com]
▶ ExxonMobil: A $20 Billion Reason to Buy   [Nov-04-18 06:37AM  Motley Fool]
▶ Buyers of Iranian Oil to Get Waivers: Sanctions Wrap   [Nov-02-18 01:21PM  Bloomberg]
▶ Equinor Strikes More Oil At Giant Johan Castberg Field   [Oct-29-18 05:00PM  Oilprice.com]
▶ Is Libya's Latest Oil Production Target Too Ambitious?   [Oct-28-18 01:00PM  Oilprice.com]
▶ Eni SpA Enjoys a Boost in Net Earnings   [01:17PM  GuruFocus.com]
▶ [$$] Higher oil prices drive profits at Eni   [02:13AM  Financial Times]
▶ Libyan Oil Production Could Get Major Boost   [Oct-22-18 05:00PM  Oilprice.com]
▶ The Biggest Winners In The Mediterranean Energy War   [Oct-20-18 01:00PM  Oilprice.com]
▶ The Next Oil Boom: Excitement About Alaskan Crude Builds   [Oct-16-18 02:22PM  TheStreet.com]
▶ [$$] Is Europes robust corporate comeback sustainable?   [Oct-14-18 12:00AM  Financial Times]
▶ Oil Prices Rise On Iran, Hurricane Outages   [04:00PM  Oilprice.com]
▶ Eni and Newmont Mining skid while Arconic and Kellogg climb   [Oct-08-18 05:32PM  Associated Press]
▶ Egypt Feels The Squeeze Of Higher Oil Prices   [Oct-04-18 05:00PM  Oilprice.com]
▶ The Oil Industry Needs Large New Discoveries, Very Soon   [Oct-01-18 07:00PM  Oilprice.com]
▶ Norways Offshore Oil Boom Is Back On   [Sep-16-18 05:00PM  Oilprice.com]
▶ Egypts Giant Zohr Gas Field Boosts Production Six-fold   [Sep-13-18 03:00PM  Oilprice.com]
▶ The Start Of Saudi Arabias Power Play   [Sep-09-18 03:00PM  Oilprice.com]
▶ Buy Eni After a Plunge   [Sep-04-18 05:13PM  GuruFocus.com]
▶ Oil Holds Gains Despite Downward Pressure   [Aug-28-18 03:00PM  Oilprice.com]
▶ [$$] In Egypts Vision of Energy Independence, Egyptians Pay More   [Aug-27-18 10:18PM  The Wall Street Journal]
▶ Is This Europes Newest Oil & Gas Producer?   [Aug-08-18 04:00PM  Oilprice.com]
▶ Ghana Boosts Natural Gas Production   [Aug-07-18 04:00PM  Oilprice.com]
▶ Pakistan: Exxon Is Close To Making A Mega Oil Discovery   [Aug-06-18 03:00PM  Oilprice.com]
▶ [$$] We need to know about oil companies price assumptions   [Aug-05-18 02:21AM  Financial Times]
▶ [$$] Italian corporate bonds outperform sovereign debt   [Aug-01-18 12:00AM  Financial Times]
▶ Global Oil Discoveries See Remarkable Recovery In 2018   [Jul-27-18 10:30AM  Oilprice.com]

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