Intrinsic value of ENI ADR - E

Previous Close

$32.96

  Intrinsic Value

$7.49

stock screener

  Rating & Target

str. sell

-77%

Previous close

$32.96

 
Intrinsic value

$7.49

 
Up/down potential

-77%

 
Rating

str. sell

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

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 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 60.1

 

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, %
  -22.86
  25.90
  23.81
  21.93
  20.24
  18.71
  17.34
  16.11
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
  6.09
  5.98
Revenue, $m
  58,852
  74,095
  91,737
  111,854
  134,488
  159,654
  187,340
  217,516
  250,135
  285,146
  322,492
  362,118
  403,974
  448,018
  494,220
  542,561
  593,036
  645,655
  700,442
  757,437
  816,693
  878,279
  942,278
  1,008,786
  1,077,912
  1,149,777
  1,224,517
  1,302,279
  1,383,220
  1,467,510
  1,555,332
Variable operating expenses, $m
 
  77,096
  95,420
  116,314
  139,823
  165,962
  194,717
  226,058
  259,938
  296,301
  335,090
  376,107
  419,580
  465,326
  513,313
  563,521
  615,946
  670,598
  727,502
  786,699
  848,244
  912,210
  978,681
  1,047,758
  1,119,555
  1,194,197
  1,271,824
  1,352,590
  1,436,658
  1,524,205
  1,615,419
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
  56,762
  77,096
  95,420
  116,314
  139,823
  165,962
  194,717
  226,058
  259,938
  296,301
  335,090
  376,107
  419,580
  465,326
  513,313
  563,521
  615,946
  670,598
  727,502
  786,699
  848,244
  912,210
  978,681
  1,047,758
  1,119,555
  1,194,197
  1,271,824
  1,352,590
  1,436,658
  1,524,205
  1,615,419
Operating income, $m
  2,091
  -3,002
  -3,683
  -4,461
  -5,335
  -6,307
  -7,377
  -8,543
  -9,803
  -11,155
  -12,598
  -13,990
  -15,607
  -17,308
  -19,093
  -20,961
  -22,911
  -24,944
  -27,060
  -29,262
  -31,551
  -33,931
  -36,403
  -38,972
  -41,643
  -44,419
  -47,307
  -50,311
  -53,438
  -56,694
  -60,087
EBITDA, $m
  10,069
  6,994
  8,659
  10,558
  12,694
  15,069
  17,683
  20,531
  23,610
  26,914
  30,439
  34,179
  38,130
  42,287
  46,648
  51,211
  55,975
  60,942
  66,113
  71,493
  77,086
  82,899
  88,940
  95,217
  101,742
  108,525
  115,579
  122,919
  130,559
  138,515
  146,804
Interest expense (income), $m
  823
  760
  1,376
  2,093
  2,911
  3,831
  4,854
  5,979
  7,206
  8,531
  9,955
  11,472
  13,083
  14,784
  16,574
  18,452
  20,417
  22,469
  24,607
  26,834
  29,151
  31,559
  34,063
  36,664
  39,367
  42,177
  45,098
  48,135
  51,296
  54,586
  58,012
Earnings before tax, $m
  941
  -3,761
  -5,060
  -6,554
  -8,246
  -10,138
  -12,231
  -14,522
  -17,008
  -19,687
  -22,553
  -25,462
  -28,690
  -32,093
  -35,668
  -39,413
  -43,328
  -47,412
  -51,668
  -56,096
  -60,702
  -65,490
  -70,466
  -75,636
  -81,010
  -86,596
  -92,404
  -98,446
  -104,734
  -111,280
  -118,099
Tax expense, $m
  2,043
  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
Net income, $m
  -1,545
  -3,761
  -5,060
  -6,554
  -8,246
  -10,138
  -12,231
  -14,522
  -17,008
  -19,687
  -22,553
  -25,462
  -28,690
  -32,093
  -35,668
  -39,413
  -43,328
  -47,412
  -51,668
  -56,096
  -60,702
  -65,490
  -70,466
  -75,636
  -81,010
  -86,596
  -92,404
  -98,446
  -104,734
  -111,280
  -118,099

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12,747
  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
  131,448
  149,384
  184,953
  225,511
  271,146
  321,884
  377,703
  438,540
  504,305
  574,891
  650,185
  730,076
  814,463
  903,262
  996,411
  1,093,872
  1,195,636
  1,301,723
  1,412,181
  1,527,090
  1,646,558
  1,770,725
  1,899,755
  2,033,843
  2,173,209
  2,318,099
  2,468,785
  2,625,562
  2,788,749
  2,958,690
  3,135,750
Adjusted assets (=assets-cash), $m
  118,701
  149,384
  184,953
  225,511
  271,146
  321,884
  377,703
  438,540
  504,305
  574,891
  650,185
  730,076
  814,463
  903,262
  996,411
  1,093,872
  1,195,636
  1,301,723
  1,412,181
  1,527,090
  1,646,558
  1,770,725
  1,899,755
  2,033,843
  2,173,209
  2,318,099
  2,468,785
  2,625,562
  2,788,749
  2,958,690
  3,135,750
Revenue / Adjusted assets
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
  0.496
Average production assets, $m
  75,181
  94,619
  117,148
  142,837
  171,742
  203,879
  239,234
  277,767
  319,423
  364,131
  411,822
  462,424
  515,874
  572,119
  631,119
  692,850
  757,306
  824,501
  894,464
  967,246
  1,042,917
  1,121,563
  1,203,289
  1,288,220
  1,376,493
  1,468,265
  1,563,709
  1,663,010
  1,766,371
  1,874,011
  1,986,159
Working capital, $m
  10,844
  6,446
  7,981
  9,731
  11,700
  13,890
  16,299
  18,924
  21,762
  24,808
  28,057
  31,504
  35,146
  38,978
  42,997
  47,203
  51,594
  56,172
  60,938
  65,897
  71,052
  76,410
  81,978
  87,764
  93,778
  100,031
  106,533
  113,298
  120,340
  127,673
  135,314
Total debt, $m
  28,749
  39,322
  59,810
  83,171
  109,457
  138,682
  170,834
  205,876
  243,757
  284,414
  327,784
  373,801
  422,408
  473,556
  527,210
  583,347
  641,964
  703,069
  766,693
  832,881
  901,695
  973,214
  1,047,536
  1,124,770
  1,205,045
  1,288,502
  1,375,297
  1,465,601
  1,559,597
  1,657,482
  1,759,469
Total liabilities, $m
  75,471
  86,045
  106,533
  129,894
  156,180
  185,405
  217,557
  252,599
  290,480
  331,137
  374,507
  420,524
  469,131
  520,279
  573,933
  630,070
  688,687
  749,792
  813,416
  879,604
  948,418
  1,019,937
  1,094,259
  1,171,493
  1,251,768
  1,335,225
  1,422,020
  1,512,324
  1,606,320
  1,704,205
  1,806,192
Total equity, $m
  55,976
  63,339
  78,420
  95,617
  114,966
  136,479
  160,146
  185,941
  213,825
  243,754
  275,679
  309,552
  345,332
  382,983
  422,478
  463,802
  506,950
  551,931
  598,765
  647,486
  698,141
  750,787
  805,496
  862,349
  921,441
  982,874
  1,046,765
  1,113,238
  1,182,430
  1,254,485
  1,329,558
Total liabilities and equity, $m
  131,447
  149,384
  184,953
  225,511
  271,146
  321,884
  377,703
  438,540
  504,305
  574,891
  650,186
  730,076
  814,463
  903,262
  996,411
  1,093,872
  1,195,637
  1,301,723
  1,412,181
  1,527,090
  1,646,559
  1,770,724
  1,899,755
  2,033,842
  2,173,209
  2,318,099
  2,468,785
  2,625,562
  2,788,750
  2,958,690
  3,135,750
Debt-to-equity ratio
  0.514
  0.620
  0.760
  0.870
  0.950
  1.020
  1.070
  1.110
  1.140
  1.170
  1.190
  1.210
  1.220
  1.240
  1.250
  1.260
  1.270
  1.270
  1.280
  1.290
  1.290
  1.300
  1.300
  1.300
  1.310
  1.310
  1.310
  1.320
  1.320
  1.320
  1.320
Adjusted equity ratio
  0.394
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,545
  -3,761
  -5,060
  -6,554
  -8,246
  -10,138
  -12,231
  -14,522
  -17,008
  -19,687
  -22,553
  -25,462
  -28,690
  -32,093
  -35,668
  -39,413
  -43,328
  -47,412
  -51,668
  -56,096
  -60,702
  -65,490
  -70,466
  -75,636
  -81,010
  -86,596
  -92,404
  -98,446
  -104,734
  -111,280
  -118,099
Depreciation, amort., depletion, $m
  7,978
  9,995
  12,342
  15,018
  18,029
  21,377
  25,059
  29,073
  33,412
  38,070
  43,037
  48,169
  53,737
  59,596
  65,742
  72,172
  78,886
  85,886
  93,173
  100,755
  108,637
  116,829
  125,343
  134,190
  143,385
  152,944
  162,886
  173,230
  183,997
  195,209
  206,892
Funds from operations, $m
  8,844
  6,234
  7,283
  8,464
  9,783
  11,238
  12,829
  14,552
  16,404
  18,383
  20,485
  22,707
  25,047
  27,503
  30,074
  32,759
  35,558
  38,473
  41,506
  44,658
  47,935
  51,340
  54,877
  58,553
  62,375
  66,348
  70,482
  74,784
  79,263
  83,929
  88,792
Change in working capital, $m
  -187
  1,326
  1,535
  1,750
  1,969
  2,189
  2,409
  2,625
  2,838
  3,046
  3,249
  3,447
  3,641
  3,832
  4,020
  4,206
  4,391
  4,578
  4,766
  4,959
  5,155
  5,358
  5,568
  5,786
  6,014
  6,252
  6,502
  6,765
  7,042
  7,333
  7,641
Cash from operations, $m
  9,031
  4,908
  5,748
  6,714
  7,814
  9,049
  10,420
  11,926
  13,566
  15,337
  17,236
  19,260
  21,406
  23,671
  26,054
  28,553
  31,167
  33,895
  36,739
  39,700
  42,780
  45,982
  49,309
  52,767
  56,361
  60,096
  63,980
  68,019
  72,221
  76,596
  81,152
Maintenance CAPEX, $m
  0
  -7,831
  -9,856
  -12,203
  -14,879
  -17,890
  -21,237
  -24,920
  -28,934
  -33,273
  -37,930
  -42,898
  -48,169
  -53,737
  -59,596
  -65,742
  -72,172
  -78,886
  -85,886
  -93,173
  -100,755
  -108,637
  -116,829
  -125,343
  -134,190
  -143,385
  -152,944
  -162,886
  -173,230
  -183,997
  -195,209
New CAPEX, $m
  -9,689
  -19,438
  -22,529
  -25,689
  -28,905
  -32,137
  -35,355
  -38,534
  -41,655
  -44,709
  -47,691
  -50,602
  -53,450
  -56,245
  -59,000
  -61,731
  -64,457
  -67,194
  -69,963
  -72,782
  -75,670
  -78,646
  -81,727
  -84,930
  -88,273
  -91,772
  -95,443
  -99,301
  -103,362
  -107,639
  -112,149
Cash from investing activities, $m
  -4,689
  -27,269
  -32,385
  -37,892
  -43,784
  -50,027
  -56,592
  -63,454
  -70,589
  -77,982
  -85,621
  -93,500
  -101,619
  -109,982
  -118,596
  -127,473
  -136,629
  -146,080
  -155,849
  -165,955
  -176,425
  -187,283
  -198,556
  -210,273
  -222,463
  -235,157
  -248,387
  -262,187
  -276,592
  -291,636
  -307,358
Free cash flow, $m
  4,342
  -22,361
  -26,637
  -31,178
  -35,970
  -40,978
  -46,172
  -51,527
  -57,023
  -62,645
  -68,385
  -74,241
  -80,213
  -86,310
  -92,541
  -98,920
  -105,462
  -112,185
  -119,110
  -126,256
  -133,646
  -141,302
  -149,247
  -157,506
  -166,102
  -175,061
  -184,408
  -194,169
  -204,371
  -215,040
  -226,206
Issuance/(repayment) of debt, $m
  -808
  17,618
  20,487
  23,362
  26,286
  29,225
  32,152
  35,042
  37,881
  40,658
  43,369
  46,017
  48,607
  51,148
  53,654
  56,138
  58,616
  61,106
  63,624
  66,188
  68,814
  71,520
  74,321
  77,235
  80,275
  83,457
  86,795
  90,303
  93,996
  97,886
  101,987
Issuance/(repurchase) of shares, $m
  0
  16,826
  20,141
  23,751
  27,595
  31,651
  35,898
  40,317
  44,893
  49,615
  54,477
  59,336
  64,470
  69,743
  75,163
  80,737
  86,476
  92,393
  98,502
  104,818
  111,357
  118,136
  125,174
  132,490
  140,101
  148,030
  156,295
  164,920
  173,925
  183,335
  193,173
Cash from financing (excl. dividends), $m  
  -812
  34,444
  40,628
  47,113
  53,881
  60,876
  68,050
  75,359
  82,774
  90,273
  97,846
  105,353
  113,077
  120,891
  128,817
  136,875
  145,092
  153,499
  162,126
  171,006
  180,171
  189,656
  199,495
  209,725
  220,376
  231,487
  243,090
  255,223
  267,921
  281,221
  295,160
Total cash flow (excl. dividends), $m
  3,532
  12,083
  13,991
  15,934
  17,911
  19,898
  21,877
  23,831
  25,751
  27,628
  29,461
  31,112
  32,863
  34,581
  36,275
  37,955
  39,631
  41,314
  43,016
  44,749
  46,525
  48,355
  50,249
  52,218
  54,274
  56,425
  58,682
  61,054
  63,551
  66,181
  68,953
Retained Cash Flow (-), $m
  2,593
  -16,826
  -20,141
  -23,751
  -27,595
  -31,651
  -35,898
  -40,317
  -44,893
  -49,615
  -54,477
  -59,336
  -64,470
  -69,743
  -75,163
  -80,737
  -86,476
  -92,393
  -98,502
  -104,818
  -111,357
  -118,136
  -125,174
  -132,490
  -140,101
  -148,030
  -156,295
  -164,920
  -173,925
  -183,335
  -193,173
Prev. year cash balance distribution, $m
 
  5,702
  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
 
  959
  -6,150
  -7,817
  -9,684
  -11,753
  -14,021
  -16,485
  -19,142
  -21,987
  -25,016
  -28,224
  -31,607
  -35,162
  -38,887
  -42,782
  -46,845
  -51,079
  -55,486
  -60,068
  -64,832
  -69,782
  -74,926
  -80,271
  -85,827
  -91,604
  -97,613
  -103,865
  -110,375
  -117,154
  -124,219
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
 
  920
  -5,630
  -6,802
  -7,974
  -9,110
  -10,175
  -11,137
  -11,964
  -12,631
  -13,115
  -13,403
  -13,488
  -13,369
  -13,055
  -12,560
  -11,904
  -11,114
  -10,218
  -9,249
  -8,238
  -7,218
  -6,217
  -5,261
  -4,371
  -3,564
  -2,848
  -2,229
  -1,708
  -1,279
  -935
Current shareholders' claim on cash, %
  100
  76.2
  58.8
  45.9
  36.1
  28.8
  23.1
  18.7
  15.3
  12.6
  10.4
  8.7
  7.3
  6.1
  5.2
  4.4
  3.7
  3.2
  2.7
  2.4
  2.0
  1.8
  1.5
  1.3
  1.1
  1.0
  0.9
  0.8
  0.7
  0.6
  0.5

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 -76.8
Price to Sales 2
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 13.1
Price to Free Cash Flow -180.4
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 $58852 million for the last fiscal year's total revenue generated by ENI ADR. The default revenue input number comes from 2016 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 25.9% 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 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 104.1%.

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 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 3.5% 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 127.7%.

Life of production assets of 9.6 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 8.7%. 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 - $55976 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 1823.04 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 $60.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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STO Statoil ADR 20.55 16.36  hold
CVX Chevron 119.93 18.60  str.sell
PTR PetroChina ADR 69.48 12.46  str.sell
BP BP ADR 40.65 6.36  str.sell

COMPANY NEWS

▶ Egypt Takes Giant Step Towards Energy Independence   [Dec-03-17 11:00AM  Oilprice.com]
▶ OPEC Extension Sends Oil Prices Soaring   [Dec-01-17 03:30PM  Oilprice.com]
▶ Pakistan in LNG talks with France, Italy and Spain   [Nov-30-17 12:37PM  Reuters]
▶ Venezuela Could Lose A Lot More Oil Production   [Nov-26-17 07:00PM  Oilprice.com]
▶ Flurry Of Bullish News Boosts Oil Prices   [Nov-24-17 03:00PM  Oilprice.com]
▶ ETFs with exposure to Eni SpA : November 16, 2017   [Nov-16-17 11:29AM  Capital Cube]
▶ Stock Market News For Nov 15, 2017   [Nov-15-17 09:21AM  Zacks]
▶ Eni Enters E&P Agreement for Block 52, Offshore Oman   [Nov-13-17 07:00PM  Rigzone.com]
▶ Russia Unfazed By U.S. Oil Sanctions   [Nov-09-17 04:00PM  Oilprice.com]
▶ ETFs with exposure to Eni SpA : November 3, 2017   [Nov-03-17 12:07PM  Capital Cube]
▶ Big Oil Urges OPEC: Keep Floor Under Oil Prices   [Oct-30-17 08:00PM  Oilprice.com]
▶ Eni SpA posts 3Q profit   [05:01AM  Associated Press]
▶ Trumps Iran Decision Haunts Big Oil   [Oct-18-17 07:00PM  Oilprice.com]
▶ Trump Just Made Iran A Wildcard   [Oct-14-17 07:00PM  Oilprice.com]
▶ These Integrated Energy Stocks Are Losing This Week   [Oct-05-17 01:07PM  Market Realist]
▶ The Natural Gas Giant To Challenge Israel   [Oct-04-17 01:00PM  Oilprice.com]
▶ How Wall Street Analysts View BPs 4Q17 Dividend   [Sep-29-17 10:40AM  Market Realist]
▶ The Worlds Largest Offshore Oil Field Is Back In Action   [Sep-18-17 06:00PM  Oilprice.com]
▶ Investors Flock To The Next Big LNG Hot Spot   [Sep-17-17 11:00AM  Oilprice.com]
▶ ETFs with exposure to Eni SpA : September 15, 2017   [Sep-15-17 05:24PM  Capital Cube]
▶ [$$] Maduro's economic plan fails to lift Venezuela's gloom   [Sep-13-17 09:19AM  Financial Times]
▶ [$$] Big Oil bets on a dash for gas   [Sep-07-17 01:35PM  Financial Times]
▶ Is Egyptian Oil Set For A Rebound?   [Sep-03-17 05:00PM  Oilprice.com]
▶ Can Big Data Save Big Oil?   [Aug-25-17 12:30PM  Barrons.com]
▶ Billions In Oil Deals Shield Iran From U.S. Sanctions   [Aug-24-17 05:00PM  Oilprice.com]
▶ Forget Oil Prices, Oil Majors Are A Buy   [Aug-20-17 05:00PM  Oilprice.com]
▶ Whats BP Correlation with WTI so Far in 3Q17?   [Aug-18-17 09:06AM  Market Realist]
▶ Big Oil Might Be In Better Shape Than U.S. Shale   [Aug-09-17 06:00PM  Oilprice.com]
▶ Enis Arctic Risk Could Pay Off   [Aug-06-17 01:00PM  Oilprice.com]
▶ How Will The EU Respond To Fresh US Sanctions On Russia?   [Aug-02-17 03:00PM  Oilprice.com]
▶ [$$] Eni fast-tracks promising Mexican well   [Aug-01-17 01:44AM  Financial Times]
▶ Eni SpA posts 2Q profit   [Jul-28-17 08:04PM  Associated Press]
▶ Why Are Majors Shying Away From Gazprom?   [Jul-27-17 03:00PM  Oilprice.com]
▶ How Chevron Stock Has Performed ahead of 2Q17 Earnings   [Jul-20-17 06:06PM  Market Realist]
▶ Will Enis Arctic Efforts Be Profitable?   [Jul-19-17 05:00PM  Oilprice.com]
▶ Oil Up As Saudis Consider Deeper Output Cuts   [Jul-18-17 03:00PM  Oilprice.com]
Financial statements of E
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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