Intrinsic value of Enel Americas ADR - ENIA

Previous Close

$9.81

  Intrinsic Value

$55.75

stock screener

  Rating & Target

str. buy

+468%

Previous close

$9.81

 
Intrinsic value

$55.75

 
Up/down potential

+468%

 
Rating

str. buy

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

We calculate the intrinsic value of ENIA 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 11.4

 

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, %
  -1.97
  33.30
  30.47
  27.92
  25.63
  23.57
  21.71
  20.04
  18.54
  17.18
  15.96
  14.87
  13.88
  12.99
  12.19
  11.47
  10.83
  10.24
  9.72
  9.25
  8.82
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
Revenue, $m
  8,044
  10,723
  13,990
  17,896
  22,483
  27,782
  33,814
  40,590
  48,113
  56,380
  65,381
  75,101
  85,526
  96,638
  108,422
  120,862
  133,948
  147,670
  162,023
  177,006
  192,623
  208,882
  225,794
  243,376
  261,649
  280,638
  300,372
  320,883
  342,207
  364,386
  387,462
Variable operating expenses, $m
 
  6,796
  8,845
  11,294
  14,171
  17,494
  21,276
  25,526
  30,244
  35,428
  41,073
  47,097
  53,634
  60,603
  67,993
  75,794
  84,000
  92,605
  101,606
  111,002
  120,796
  130,992
  141,598
  152,624
  164,083
  175,991
  188,367
  201,229
  214,602
  228,511
  242,982
Fixed operating expenses, $m
 
  1,099
  1,126
  1,154
  1,183
  1,213
  1,243
  1,274
  1,306
  1,339
  1,372
  1,407
  1,442
  1,478
  1,515
  1,553
  1,591
  1,631
  1,672
  1,714
  1,757
  1,801
  1,846
  1,892
  1,939
  1,987
  2,037
  2,088
  2,140
  2,194
  2,249
Total operating expenses, $m
  6,160
  7,895
  9,971
  12,448
  15,354
  18,707
  22,519
  26,800
  31,550
  36,767
  42,445
  48,504
  55,076
  62,081
  69,508
  77,347
  85,591
  94,236
  103,278
  112,716
  122,553
  132,793
  143,444
  154,516
  166,022
  177,978
  190,404
  203,317
  216,742
  230,705
  245,231
Operating income, $m
  1,884
  2,828
  4,019
  5,447
  7,129
  9,075
  11,294
  13,790
  16,563
  19,613
  22,936
  26,598
  30,450
  34,558
  38,915
  43,516
  48,356
  53,433
  58,744
  64,290
  70,070
  76,089
  82,350
  88,861
  95,627
  102,659
  109,968
  117,565
  125,465
  133,682
  142,232
EBITDA, $m
  1,884
  4,095
  5,650
  7,514
  9,707
  12,244
  15,136
  18,387
  21,999
  25,971
  30,298
  34,972
  39,986
  45,333
  51,004
  56,992
  63,291
  69,898
  76,810
  84,026
  91,548
  99,379
  107,526
  115,997
  124,801
  133,951
  143,460
  153,344
  163,621
  174,311
  185,434
Interest expense (income), $m
  377
  346
  664
  1,054
  1,520
  2,067
  2,699
  3,419
  4,227
  5,125
  6,111
  7,185
  8,345
  9,589
  10,914
  12,320
  13,804
  15,366
  17,003
  18,715
  20,503
  22,366
  24,306
  26,323
  28,421
  30,601
  32,867
  35,221
  37,668
  40,212
  42,858
Earnings before tax, $m
  1,440
  2,482
  3,355
  4,394
  5,609
  7,008
  8,595
  10,371
  12,336
  14,488
  16,825
  19,413
  22,105
  24,969
  28,000
  31,195
  34,552
  38,068
  41,742
  45,575
  49,568
  53,723
  58,045
  62,537
  67,206
  72,058
  77,101
  82,344
  87,797
  93,469
  99,373
Tax expense, $m
  556
  670
  906
  1,186
  1,514
  1,892
  2,321
  2,800
  3,331
  3,912
  4,543
  5,241
  5,968
  6,742
  7,560
  8,423
  9,329
  10,278
  11,270
  12,305
  13,383
  14,505
  15,672
  16,885
  18,146
  19,456
  20,817
  22,233
  23,705
  25,237
  26,831
Net income, $m
  593
  1,812
  2,449
  3,207
  4,095
  5,116
  6,274
  7,571
  9,005
  10,576
  12,282
  14,171
  16,137
  18,227
  20,440
  22,773
  25,223
  27,789
  30,471
  33,269
  36,184
  39,218
  42,373
  45,652
  49,060
  52,602
  56,284
  60,111
  64,092
  68,233
  72,543

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,825
  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
  16,851
  18,681
  24,373
  31,178
  39,169
  48,401
  58,909
  70,714
  83,821
  98,224
  113,904
  130,839
  149,000
  168,360
  188,889
  210,562
  233,359
  257,264
  282,269
  308,373
  335,580
  363,905
  393,369
  424,000
  455,835
  488,917
  523,296
  559,029
  596,180
  634,819
  675,022
Adjusted assets (=assets-cash), $m
  14,026
  18,681
  24,373
  31,178
  39,169
  48,401
  58,909
  70,714
  83,821
  98,224
  113,904
  130,839
  149,000
  168,360
  188,889
  210,562
  233,359
  257,264
  282,269
  308,373
  335,580
  363,905
  393,369
  424,000
  455,835
  488,917
  523,296
  559,029
  596,180
  634,819
  675,022
Revenue / Adjusted assets
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
  0.574
Average production assets, $m
  8,966
  11,956
  15,599
  19,954
  25,069
  30,977
  37,702
  45,258
  53,646
  62,864
  72,900
  83,738
  95,362
  107,752
  120,891
  134,762
  149,352
  164,652
  180,655
  197,362
  214,775
  232,903
  251,760
  271,364
  291,739
  312,912
  334,914
  357,784
  381,561
  406,290
  432,021
Working capital, $m
  954
  -1,501
  -1,959
  -2,505
  -3,148
  -3,889
  -4,734
  -5,683
  -6,736
  -7,893
  -9,153
  -10,514
  -11,974
  -13,529
  -15,179
  -16,921
  -18,753
  -20,674
  -22,683
  -24,781
  -26,967
  -29,243
  -31,611
  -34,073
  -36,631
  -39,289
  -42,052
  -44,924
  -47,909
  -51,014
  -54,245
Total debt, $m
  4,308
  6,845
  10,864
  15,669
  21,310
  27,828
  35,247
  43,581
  52,835
  63,003
  74,073
  86,029
  98,851
  112,519
  127,012
  142,314
  158,408
  175,285
  192,939
  211,368
  230,577
  250,574
  271,375
  293,001
  315,477
  338,832
  363,104
  388,331
  414,560
  441,839
  470,222
Total liabilities, $m
  10,652
  13,188
  17,207
  22,012
  27,653
  34,171
  41,590
  49,924
  59,178
  69,346
  80,416
  92,372
  105,194
  118,862
  133,355
  148,657
  164,751
  181,628
  199,282
  217,711
  236,920
  256,917
  277,718
  299,344
  321,820
  345,175
  369,447
  394,674
  420,903
  448,182
  476,565
Total equity, $m
  6,200
  5,492
  7,166
  9,166
  11,516
  14,230
  17,319
  20,790
  24,643
  28,878
  33,488
  38,467
  43,806
  49,498
  55,533
  61,905
  68,607
  75,636
  82,987
  90,662
  98,661
  106,988
  115,650
  124,656
  134,015
  143,742
  153,849
  164,354
  175,277
  186,637
  198,456
Total liabilities and equity, $m
  16,852
  18,680
  24,373
  31,178
  39,169
  48,401
  58,909
  70,714
  83,821
  98,224
  113,904
  130,839
  149,000
  168,360
  188,888
  210,562
  233,358
  257,264
  282,269
  308,373
  335,581
  363,905
  393,368
  424,000
  455,835
  488,917
  523,296
  559,028
  596,180
  634,819
  675,021
Debt-to-equity ratio
  0.695
  1.250
  1.520
  1.710
  1.850
  1.960
  2.040
  2.100
  2.140
  2.180
  2.210
  2.240
  2.260
  2.270
  2.290
  2.300
  2.310
  2.320
  2.320
  2.330
  2.340
  2.340
  2.350
  2.350
  2.350
  2.360
  2.360
  2.360
  2.370
  2.370
  2.370
Adjusted equity ratio
  0.241
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294
  0.294

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  593
  1,812
  2,449
  3,207
  4,095
  5,116
  6,274
  7,571
  9,005
  10,576
  12,282
  14,171
  16,137
  18,227
  20,440
  22,773
  25,223
  27,789
  30,471
  33,269
  36,184
  39,218
  42,373
  45,652
  49,060
  52,602
  56,284
  60,111
  64,092
  68,233
  72,543
Depreciation, amort., depletion, $m
  0
  1,267
  1,631
  2,067
  2,578
  3,169
  3,842
  4,597
  5,436
  6,358
  7,361
  8,374
  9,536
  10,775
  12,089
  13,476
  14,935
  16,465
  18,066
  19,736
  21,477
  23,290
  25,176
  27,136
  29,174
  31,291
  33,491
  35,778
  38,156
  40,629
  43,202
Funds from operations, $m
  5,300
  3,079
  4,080
  5,274
  6,673
  8,285
  10,116
  12,168
  14,441
  16,934
  19,644
  22,545
  25,673
  29,003
  32,529
  36,249
  40,158
  44,254
  48,537
  53,006
  57,662
  62,508
  67,549
  72,789
  78,234
  83,894
  89,775
  95,890
  102,248
  108,862
  115,745
Change in working capital, $m
  2,650
  -375
  -457
  -547
  -642
  -742
  -844
  -949
  -1,053
  -1,157
  -1,260
  -1,361
  -1,459
  -1,556
  -1,650
  -1,742
  -1,832
  -1,921
  -2,009
  -2,098
  -2,186
  -2,276
  -2,368
  -2,462
  -2,558
  -2,658
  -2,763
  -2,872
  -2,985
  -3,105
  -3,231
Cash from operations, $m
  2,650
  3,454
  4,538
  5,821
  7,315
  9,027
  10,960
  13,117
  15,495
  18,092
  20,904
  23,906
  27,132
  30,558
  34,179
  37,991
  41,990
  46,176
  50,546
  55,103
  59,848
  64,784
  69,916
  75,250
  80,793
  86,552
  92,538
  98,761
  105,233
  111,967
  118,975
Maintenance CAPEX, $m
  0
  -897
  -1,196
  -1,560
  -1,995
  -2,507
  -3,098
  -3,770
  -4,526
  -5,365
  -6,286
  -7,290
  -8,374
  -9,536
  -10,775
  -12,089
  -13,476
  -14,935
  -16,465
  -18,066
  -19,736
  -21,477
  -23,290
  -25,176
  -27,136
  -29,174
  -31,291
  -33,491
  -35,778
  -38,156
  -40,629
New CAPEX, $m
  -1,287
  -2,990
  -3,643
  -4,356
  -5,114
  -5,908
  -6,725
  -7,555
  -8,389
  -9,218
  -10,036
  -10,838
  -11,624
  -12,390
  -13,139
  -13,871
  -14,590
  -15,300
  -16,004
  -16,706
  -17,413
  -18,128
  -18,857
  -19,604
  -20,375
  -21,173
  -22,003
  -22,870
  -23,777
  -24,729
  -25,730
Cash from investing activities, $m
  -769
  -3,887
  -4,839
  -5,916
  -7,109
  -8,415
  -9,823
  -11,325
  -12,915
  -14,583
  -16,322
  -18,128
  -19,998
  -21,926
  -23,914
  -25,960
  -28,066
  -30,235
  -32,469
  -34,772
  -37,149
  -39,605
  -42,147
  -44,780
  -47,511
  -50,347
  -53,294
  -56,361
  -59,555
  -62,885
  -66,359
Free cash flow, $m
  1,881
  -433
  -301
  -94
  205
  612
  1,137
  1,791
  2,580
  3,509
  4,582
  5,778
  7,135
  8,632
  10,265
  12,030
  13,924
  15,941
  18,078
  20,331
  22,699
  25,179
  27,769
  30,470
  33,281
  36,206
  39,244
  42,400
  45,678
  49,081
  52,616
Issuance/(repayment) of debt, $m
  425
  3,281
  4,019
  4,805
  5,642
  6,517
  7,419
  8,334
  9,254
  10,168
  11,070
  11,956
  12,822
  13,668
  14,493
  15,301
  16,095
  16,877
  17,654
  18,429
  19,208
  19,997
  20,801
  21,626
  22,475
  23,356
  24,272
  25,228
  26,229
  27,279
  28,383
Issuance/(repurchase) of shares, $m
  -146
  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  
  -477
  3,281
  4,019
  4,805
  5,642
  6,517
  7,419
  8,334
  9,254
  10,168
  11,070
  11,956
  12,822
  13,668
  14,493
  15,301
  16,095
  16,877
  17,654
  18,429
  19,208
  19,997
  20,801
  21,626
  22,475
  23,356
  24,272
  25,228
  26,229
  27,279
  28,383
Total cash flow (excl. dividends), $m
  1,397
  2,849
  3,718
  4,710
  5,847
  7,129
  8,556
  10,125
  11,834
  13,678
  15,652
  17,734
  19,957
  22,300
  24,758
  27,332
  30,018
  32,818
  35,731
  38,760
  41,907
  45,176
  48,570
  52,095
  55,757
  59,561
  63,516
  67,628
  71,906
  76,360
  80,999
Retained Cash Flow (-), $m
  2,286
  -1,373
  -1,673
  -2,001
  -2,349
  -2,714
  -3,089
  -3,471
  -3,854
  -4,234
  -4,610
  -4,979
  -5,339
  -5,692
  -6,035
  -6,372
  -6,702
  -7,028
  -7,352
  -7,674
  -7,999
  -8,328
  -8,662
  -9,006
  -9,359
  -9,726
  -10,107
  -10,506
  -10,922
  -11,360
  -11,820
Prev. year cash balance distribution, $m
 
  2,081
  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
 
  3,557
  2,044
  2,710
  3,498
  4,415
  5,467
  6,655
  7,980
  9,443
  11,042
  12,755
  14,618
  16,608
  18,723
  20,960
  23,316
  25,790
  28,380
  31,086
  33,908
  36,849
  39,908
  43,090
  46,397
  49,835
  53,408
  57,122
  60,984
  65,000
  69,180
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  3,330
  1,781
  2,181
  2,583
  2,968
  3,318
  3,614
  3,842
  3,990
  4,050
  4,016
  3,904
  3,714
  3,458
  3,152
  2,811
  2,453
  2,093
  1,746
  1,422
  1,131
  878
  664
  489
  351
  244
  165
  108
  69
  42
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

Enel Americas S.A., formerly Enersis Americas S.A., through its subsidiaries and jointly controlled entities, is engaged in the electricity generation, transmission and distribution businesses in Chile, Brazil, Colombia, Peru and Argentina. The Company operates through two segments: Generation and Transmission, and Distribution. The Company's Generation and Transmission segment operates through companies, including Central Comercializadora de Energia S.A. (Cemsa); Central Dock Sud S.A. (Dock Sud); Central Costanera S.A. (Costanera), and Hidroelectrica El Chocon S.A. (El Chocon). The Company's Distribution segment operates through companies, including Empresa Distribuidora Sur S.A. (Edesur); Ampla Energia e Servicos S.A. (Ampla), and Companhia Energetica do Ceara S.A. (Coelce). The Company is engaged in non-electricity business through its subsidiary, Servicios Informaticos e Inmobiliarios Ltda. (SIEI). It holds interest in Yacylec S.A., which is an electricity transmission company.

FINANCIAL RATIOS  of  Enel Americas ADR (ENIA)

Valuation Ratios
P/E Ratio 950.4
Price to Sales 70.1
Price to Book 90.9
Price to Tangible Book
Price to Cash Flow 212.7
Price to Free Cash Flow 413.5
Growth Rates
Sales Growth Rate -2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -39%
Cap. Spend. - 3 Yr. Gr. Rate 1.5%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 57.5%
Total Debt to Equity 69.5%
Interest Coverage 5
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 4.9%
Return On Total Capital 5.3%
Ret/ On T. Cap. - 3 Yr. Avg. 6.4%
Return On Equity 8.1%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 50.4%
Gross Margin - 3 Yr. Avg. 49.9%
EBITDA Margin 22.6%
EBITDA Margin - 3 Yr. Avg. 26.4%
Operating Margin 23.4%
Oper. Margin - 3 Yr. Avg. 24.6%
Pre-Tax Margin 17.9%
Pre-Tax Margin - 3 Yr. Avg. 21.6%
Net Profit Margin 7.4%
Net Profit Margin - 3 Yr. Avg. 10.5%
Effective Tax Rate 38.6%
Eff/ Tax Rate - 3 Yr. Avg. 38.7%
Payout Ratio 112.6%

ENIA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENIA stock intrinsic value calculation we used $8044 million for the last fiscal year's total revenue generated by Enel Americas ADR. The default revenue input number comes from 2016 income statement of Enel Americas 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 ENIA stock valuation model: a) initial revenue growth rate of 33.3% 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 6.8%, whose default value for ENIA is calculated based on our internal credit rating of Enel Americas 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 Enel Americas 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 ENIA stock the variable cost ratio is equal to 63.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1072 million in the base year in the intrinsic value calculation for ENIA 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 9.7% for Enel Americas ADR.

Corporate tax rate of 27% is the nominal tax rate for Enel Americas 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 ENIA 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 ENIA are equal to 111.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Enel Americas 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 ENIA is equal to -14%. 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 - $6200 million for Enel Americas 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 1159.15 million for Enel Americas 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 Enel Americas ADR at the current share price and the inputted number of shares is $11.4 billion.

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COMPANY NEWS

▶ ETFs with exposure to Enel Americas SA : October 23, 2017   [Oct-23-17 10:34AM  Capital Cube]
▶ The Next Big Innovation In Solar Is Here   [Jul-11-17 02:30PM  Oilprice.com]
▶ Do Hedge Funds Love Enel Americas SA (ADR) (ENIA)?   [Dec-09-16 10:33AM  Insider Monkey]
▶ Do Hedge Funds Love Enel Americas SA (ADR) (ENIA)?   [10:33AM  at Insider Monkey]
Financial statements of ENIA
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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