Intrinsic value of ENSCO - ESV

Previous Close

$5.62

  Intrinsic Value

$6.77

stock screener

  Rating & Target

buy

+20%

Previous close

$5.62

 
Intrinsic value

$6.77

 
Up/down potential

+20%

 
Rating

buy

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

We calculate the intrinsic value of ESV 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 1.7

 

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, %
  -31.68
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  2,776
  2,832
  2,897
  2,971
  3,055
  3,147
  3,249
  3,360
  3,479
  3,608
  3,747
  3,895
  4,053
  4,221
  4,400
  4,590
  4,791
  5,004
  5,229
  5,467
  5,718
  5,983
  6,263
  6,558
  6,868
  7,195
  7,539
  7,902
  8,283
  8,684
  9,106
Variable operating expenses, $m
 
  3,698
  3,783
  3,880
  3,989
  4,110
  4,243
  4,388
  4,544
  4,712
  4,893
  5,087
  5,293
  5,513
  5,747
  5,995
  6,257
  6,535
  6,829
  7,140
  7,468
  7,814
  8,179
  8,564
  8,970
  9,397
  9,846
  10,320
  10,818
  11,341
  11,893
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
  1,847
  3,698
  3,783
  3,880
  3,989
  4,110
  4,243
  4,388
  4,544
  4,712
  4,893
  5,087
  5,293
  5,513
  5,747
  5,995
  6,257
  6,535
  6,829
  7,140
  7,468
  7,814
  8,179
  8,564
  8,970
  9,397
  9,846
  10,320
  10,818
  11,341
  11,893
Operating income, $m
  929
  -866
  -886
  -909
  -935
  -963
  -994
  -1,028
  -1,065
  -1,104
  -1,147
  -1,192
  -1,240
  -1,292
  -1,346
  -1,405
  -1,466
  -1,531
  -1,600
  -1,673
  -1,750
  -1,831
  -1,916
  -2,007
  -2,102
  -2,202
  -2,307
  -2,418
  -2,535
  -2,657
  -2,786
EBITDA, $m
  1,374
  -412
  -422
  -432
  -444
  -458
  -473
  -489
  -506
  -525
  -545
  -567
  -590
  -614
  -640
  -668
  -697
  -728
  -761
  -796
  -832
  -871
  -911
  -954
  -999
  -1,047
  -1,097
  -1,150
  -1,205
  -1,264
  -1,325
Interest expense (income), $m
  265
  237
  243
  249
  257
  265
  274
  284
  295
  307
  320
  334
  349
  365
  382
  400
  419
  439
  460
  483
  506
  531
  558
  586
  615
  647
  679
  714
  750
  788
  828
Earnings before tax, $m
  998
  -1,104
  -1,129
  -1,158
  -1,191
  -1,228
  -1,268
  -1,312
  -1,360
  -1,412
  -1,467
  -1,526
  -1,589
  -1,657
  -1,728
  -1,804
  -1,885
  -1,970
  -2,060
  -2,155
  -2,256
  -2,362
  -2,474
  -2,593
  -2,717
  -2,848
  -2,986
  -3,132
  -3,285
  -3,445
  -3,615
Tax expense, $m
  109
  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
  890
  -1,104
  -1,129
  -1,158
  -1,191
  -1,228
  -1,268
  -1,312
  -1,360
  -1,412
  -1,467
  -1,526
  -1,589
  -1,657
  -1,728
  -1,804
  -1,885
  -1,970
  -2,060
  -2,155
  -2,256
  -2,362
  -2,474
  -2,593
  -2,717
  -2,848
  -2,986
  -3,132
  -3,285
  -3,445
  -3,615

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,602
  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
  14,375
  11,998
  12,274
  12,589
  12,943
  13,336
  13,766
  14,235
  14,743
  15,290
  15,876
  16,504
  17,174
  17,887
  18,645
  19,449
  20,302
  21,204
  22,158
  23,166
  24,231
  25,354
  26,538
  27,787
  29,102
  30,488
  31,946
  33,482
  35,097
  36,797
  38,585
Adjusted assets (=assets-cash), $m
  11,773
  11,998
  12,274
  12,589
  12,943
  13,336
  13,766
  14,235
  14,743
  15,290
  15,876
  16,504
  17,174
  17,887
  18,645
  19,449
  20,302
  21,204
  22,158
  23,166
  24,231
  25,354
  26,538
  27,787
  29,102
  30,488
  31,946
  33,482
  35,097
  36,797
  38,585
Revenue / Adjusted assets
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
Average production assets, $m
  11,004
  11,224
  11,482
  11,777
  12,109
  12,476
  12,879
  13,317
  13,792
  14,303
  14,852
  15,440
  16,066
  16,733
  17,443
  18,195
  18,992
  19,836
  20,729
  21,672
  22,668
  23,718
  24,827
  25,995
  27,225
  28,521
  29,886
  31,322
  32,834
  34,424
  36,096
Working capital, $m
  2,425
  159
  162
  166
  171
  176
  182
  188
  195
  202
  210
  218
  227
  236
  246
  257
  268
  280
  293
  306
  320
  335
  351
  367
  385
  403
  422
  442
  464
  486
  510
Total debt, $m
  5,275
  5,054
  5,190
  5,345
  5,519
  5,712
  5,924
  6,155
  6,404
  6,673
  6,962
  7,271
  7,601
  7,951
  8,324
  8,720
  9,139
  9,583
  10,053
  10,549
  11,072
  11,625
  12,208
  12,822
  13,469
  14,151
  14,869
  15,624
  16,419
  17,255
  18,135
Total liabilities, $m
  6,124
  5,903
  6,039
  6,194
  6,368
  6,561
  6,773
  7,004
  7,253
  7,522
  7,811
  8,120
  8,450
  8,800
  9,173
  9,569
  9,988
  10,432
  10,902
  11,398
  11,921
  12,474
  13,057
  13,671
  14,318
  15,000
  15,718
  16,473
  17,268
  18,104
  18,984
Total equity, $m
  8,251
  6,095
  6,235
  6,395
  6,575
  6,775
  6,993
  7,232
  7,489
  7,767
  8,065
  8,384
  8,724
  9,087
  9,472
  9,880
  10,313
  10,772
  11,256
  11,768
  12,309
  12,880
  13,481
  14,116
  14,784
  15,488
  16,229
  17,009
  17,829
  18,693
  19,601
Total liabilities and equity, $m
  14,375
  11,998
  12,274
  12,589
  12,943
  13,336
  13,766
  14,236
  14,742
  15,289
  15,876
  16,504
  17,174
  17,887
  18,645
  19,449
  20,301
  21,204
  22,158
  23,166
  24,230
  25,354
  26,538
  27,787
  29,102
  30,488
  31,947
  33,482
  35,097
  36,797
  38,585
Debt-to-equity ratio
  0.639
  0.830
  0.830
  0.840
  0.840
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.870
  0.870
  0.880
  0.880
  0.880
  0.890
  0.890
  0.890
  0.900
  0.900
  0.900
  0.910
  0.910
  0.910
  0.910
  0.920
  0.920
  0.920
  0.920
  0.930
Adjusted equity ratio
  0.480
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508
  0.508

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  890
  -1,104
  -1,129
  -1,158
  -1,191
  -1,228
  -1,268
  -1,312
  -1,360
  -1,412
  -1,467
  -1,526
  -1,589
  -1,657
  -1,728
  -1,804
  -1,885
  -1,970
  -2,060
  -2,155
  -2,256
  -2,362
  -2,474
  -2,593
  -2,717
  -2,848
  -2,986
  -3,132
  -3,285
  -3,445
  -3,615
Depreciation, amort., depletion, $m
  445
  454
  465
  477
  490
  505
  521
  539
  558
  579
  601
  625
  650
  677
  706
  737
  769
  803
  839
  877
  918
  960
  1,005
  1,052
  1,102
  1,155
  1,210
  1,268
  1,329
  1,394
  1,461
Funds from operations, $m
  1,072
  -649
  -664
  -681
  -701
  -723
  -747
  -773
  -802
  -832
  -866
  -901
  -939
  -979
  -1,022
  -1,067
  -1,116
  -1,167
  -1,221
  -1,278
  -1,338
  -1,402
  -1,469
  -1,540
  -1,615
  -1,694
  -1,776
  -1,863
  -1,955
  -2,052
  -2,153
Change in working capital, $m
  -8
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  24
Cash from operations, $m
  1,080
  -652
  -668
  -686
  -706
  -728
  -753
  -779
  -808
  -840
  -873
  -909
  -948
  -989
  -1,032
  -1,078
  -1,127
  -1,179
  -1,234
  -1,291
  -1,353
  -1,417
  -1,485
  -1,557
  -1,632
  -1,712
  -1,796
  -1,884
  -1,977
  -2,074
  -2,177
Maintenance CAPEX, $m
  0
  -445
  -454
  -465
  -477
  -490
  -505
  -521
  -539
  -558
  -579
  -601
  -625
  -650
  -677
  -706
  -737
  -769
  -803
  -839
  -877
  -918
  -960
  -1,005
  -1,052
  -1,102
  -1,155
  -1,210
  -1,268
  -1,329
  -1,394
New CAPEX, $m
  -322
  -221
  -258
  -295
  -331
  -367
  -403
  -439
  -475
  -511
  -549
  -587
  -627
  -667
  -709
  -752
  -797
  -844
  -893
  -943
  -996
  -1,051
  -1,108
  -1,168
  -1,231
  -1,296
  -1,365
  -1,436
  -1,511
  -1,590
  -1,673
Cash from investing activities, $m
  -569
  -666
  -712
  -760
  -808
  -857
  -908
  -960
  -1,014
  -1,069
  -1,128
  -1,188
  -1,252
  -1,317
  -1,386
  -1,458
  -1,534
  -1,613
  -1,696
  -1,782
  -1,873
  -1,969
  -2,068
  -2,173
  -2,283
  -2,398
  -2,520
  -2,646
  -2,779
  -2,919
  -3,067
Free cash flow, $m
  511
  -1,319
  -1,380
  -1,446
  -1,514
  -1,585
  -1,661
  -1,739
  -1,822
  -1,910
  -2,001
  -2,098
  -2,199
  -2,306
  -2,419
  -2,537
  -2,661
  -2,792
  -2,929
  -3,074
  -3,226
  -3,385
  -3,553
  -3,730
  -3,915
  -4,110
  -4,315
  -4,530
  -4,756
  -4,994
  -5,243
Issuance/(repayment) of debt, $m
  -14
  111
  136
  155
  174
  193
  212
  231
  250
  269
  289
  309
  330
  351
  373
  396
  419
  444
  469
  496
  524
  553
  583
  614
  647
  682
  718
  755
  795
  836
  880
Issuance/(repurchase) of shares, $m
  586
  1,218
  1,269
  1,319
  1,371
  1,427
  1,487
  1,551
  1,618
  1,689
  1,765
  1,845
  1,930
  2,019
  2,113
  2,213
  2,318
  2,428
  2,545
  2,668
  2,797
  2,933
  3,076
  3,227
  3,385
  3,552
  3,727
  3,912
  4,105
  4,309
  4,523
Cash from financing (excl. dividends), $m  
  541
  1,329
  1,405
  1,474
  1,545
  1,620
  1,699
  1,782
  1,868
  1,958
  2,054
  2,154
  2,260
  2,370
  2,486
  2,609
  2,737
  2,872
  3,014
  3,164
  3,321
  3,486
  3,659
  3,841
  4,032
  4,234
  4,445
  4,667
  4,900
  5,145
  5,403
Total cash flow (excl. dividends), $m
  1,050
  10
  25
  28
  32
  35
  38
  42
  45
  49
  52
  56
  60
  64
  68
  72
  76
  80
  85
  90
  95
  100
  106
  111
  117
  124
  130
  137
  144
  152
  159
Retained Cash Flow (-), $m
  -1,738
  -1,218
  -1,269
  -1,319
  -1,371
  -1,427
  -1,487
  -1,551
  -1,618
  -1,689
  -1,765
  -1,845
  -1,930
  -2,019
  -2,113
  -2,213
  -2,318
  -2,428
  -2,545
  -2,668
  -2,797
  -2,933
  -3,076
  -3,227
  -3,385
  -3,552
  -3,727
  -3,912
  -4,105
  -4,309
  -4,523
Prev. year cash balance distribution, $m
 
  2,270
  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
 
  1,062
  -1,245
  -1,290
  -1,340
  -1,392
  -1,449
  -1,509
  -1,573
  -1,641
  -1,713
  -1,789
  -1,870
  -1,955
  -2,046
  -2,141
  -2,242
  -2,348
  -2,460
  -2,578
  -2,702
  -2,833
  -2,971
  -3,116
  -3,268
  -3,429
  -3,597
  -3,775
  -3,961
  -4,157
  -4,364
Discount rate, %
 
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
 
  1,013
  -1,126
  -1,102
  -1,074
  -1,043
  -1,007
  -967
  -923
  -875
  -823
  -769
  -712
  -653
  -594
  -534
  -475
  -417
  -362
  -310
  -262
  -218
  -178
  -143
  -113
  -88
  -66
  -49
  -36
  -25
  -18
Current shareholders' claim on cash, %
  100
  77.5
  59.7
  45.9
  35.1
  26.8
  20.4
  15.5
  11.7
  8.9
  6.7
  5.1
  3.8
  2.9
  2.1
  1.6
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0

Ensco plc is an offshore contract drilling company. The Company provides offshore contract drilling services to the international oil and gas industry. Its segments include Floaters, Jackups and Other. The Floaters segment includes its drillships and semisubmersible rigs, and provides contract drilling. Other consists of management services on rigs owned by third parties. The Floaters and the Jackups segments provide contract drilling. It owned and operated an offshore drilling rig fleet of 57 rigs, including two rigs under construction, with drilling operations around the world, as of December 31, 2016. As of December 31, 2016, its rig fleet included eight drill ships, 10 dynamically positioned semisubmersible rigs, three moored semisubmersible rigs and 38 jackup rigs. As of December 31, 2016, of its 59 rigs, 25 were located in the Middle East, Africa and Asia Pacific, 16 were located in North and South America (including Brazil) and 18 were located in Europe and the Mediterranean.

FINANCIAL RATIOS  of  ENSCO (ESV)

Valuation Ratios
P/E Ratio 1.9
Price to Sales 0.6
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 1.6
Price to Free Cash Flow 2.2
Growth Rates
Sales Growth Rate -31.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -80.1%
Cap. Spend. - 3 Yr. Gr. Rate -28.8%
Financial Strength
Quick Ratio 8
Current Ratio 0.1
LT Debt to Equity 59.9%
Total Debt to Equity 63.9%
Interest Coverage 5
Management Effectiveness
Return On Assets 8%
Ret/ On Assets - 3 Yr. Avg. -7.3%
Return On Total Capital 6.9%
Ret/ On T. Cap. - 3 Yr. Avg. -9.9%
Return On Equity 12.1%
Return On Equity - 3 Yr. Avg. -15.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 53.1%
Gross Margin - 3 Yr. Avg. 53.9%
EBITDA Margin 61.5%
EBITDA Margin - 3 Yr. Avg. 1.7%
Operating Margin 33.5%
Oper. Margin - 3 Yr. Avg. -16.6%
Pre-Tax Margin 36%
Pre-Tax Margin - 3 Yr. Avg. -18.7%
Net Profit Margin 32.1%
Net Profit Margin - 3 Yr. Avg. -30.9%
Effective Tax Rate 10.9%
Eff/ Tax Rate - 3 Yr. Avg. 2.1%
Payout Ratio 1.3%

ESV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ESV stock intrinsic value calculation we used $2776 million for the last fiscal year's total revenue generated by ENSCO. The default revenue input number comes from 2016 income statement of ENSCO. 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 ESV stock valuation model: a) initial revenue growth rate of 2% 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 4.9%, whose default value for ESV is calculated based on our internal credit rating of ENSCO, 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 ENSCO.
    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 ESV stock the variable cost ratio is equal to 130.6%.

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 ESV 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 4.8% for ENSCO.

Corporate tax rate of 27% is the nominal tax rate for ENSCO. 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 ESV 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 ESV are equal to 396.4%.

Life of production assets of 24.7 years is the average useful life of capital assets used in ENSCO 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 ESV is equal to 5.6%. 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 - $8251 million for ENSCO - 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 304.688 million for ENSCO 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 ENSCO at the current share price and the inputted number of shares is $1.7 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ ETFs with exposure to Ensco Plc : December 5, 2017   [Dec-05-17 12:46PM  Capital Cube]
▶ Is Seadrill Partners LLC a Buy?   [Dec-04-17 11:12AM  Motley Fool]
▶ ETFs with exposure to Ensco Plc : November 24, 2017   [Nov-24-17 10:36AM  Capital Cube]
▶ How Rig Count and Oil Prices Trended Last Week   [Nov-14-17 10:40AM  Market Realist]
▶ Do you believe the oil hype?   [Nov-13-17 07:25PM  Harvest Exchange]
▶ 3 Top Energy Stocks to Buy in November   [06:02AM  Motley Fool]
▶ Medtronic, Tableau, Signet, Ensco & Wynn   [Nov-09-17 01:56PM  CNBC Videos]
▶ Ensco plc Announces Cash Dividend   [Nov-07-17 05:14PM  Business Wire]
▶ ETFs with exposure to Ensco Plc : November 2, 2017   [Nov-02-17 12:07PM  Capital Cube]
▶ Analysts Revisions: Diamond Offshore, Noble, and Ensco   [Nov-01-17 10:50AM  Market Realist]
▶ S&P and Credit Suisse Revised Ratings for Offshore Drillers   [Oct-31-17 04:10PM  Market Realist]
▶ Ensco reports 3Q loss   [Oct-25-17 06:11PM  Associated Press]
▶ Ensco plc Reports Third Quarter 2017 Results   [05:15PM  Business Wire]
▶ What Analysts Project for Enscos Revenue and EBITDA in 3Q17   [Oct-20-17 04:36PM  Market Realist]
▶ Enscos Fleet Status Report Has Some Good News   [03:06PM  Market Realist]
▶ Whats in Store for Enscos 3Q17 Results?   [01:25PM  Market Realist]
▶ 3 Stocks That Are Absurdly Cheap Right Now   [Oct-19-17 07:32AM  Motley Fool]
▶ Why Citi Group Raised Enscos Target Price and Other Updates   [Oct-13-17 04:06PM  Market Realist]
▶ Updates on Enscos Acquisition of Atwood Oceanics   [Oct-10-17 05:06PM  Market Realist]
▶ Ensco completes Atwood acquisition, plans to cut jobs, close Houston HQ   [12:55PM  American City Business Journals]
▶ [$$] Shareholders Approve Ensco-Atwood Oceanics Merger   [Oct-05-17 06:46PM  The Wall Street Journal]
▶ Why UBS Upgraded Several Offshore Drilling Companies   [Oct-03-17 11:36AM  Market Realist]
▶ Top Energy Gainers on September 2529, 2017   [Oct-02-17 01:19PM  Market Realist]
▶ Transocean: Let's Make a Deal?   [12:56PM  Barrons.com]
▶ Wall Street Recommendations for Energy Stocks Last Week   [Sep-25-17 03:45PM  Market Realist]
▶ Transocean: 3 Reasons to Buy?   [12:04PM  Barrons.com]
▶ EOG Resources names retired CEO of Houston company to board   [09:45AM  American City Business Journals]
▶ How Analysts Rate Ensco in September   [Sep-19-17 10:38AM  Market Realist]
▶ These 3 Oil Stocks Soared 30% in 1 Month   [08:17AM  Motley Fool]
▶ What Happened in September in the Offshore Drilling Space?   [Sep-18-17 02:43PM  Market Realist]
▶ Ensco plc Files Investor Presentation   [09:00AM  Business Wire]
▶ These 3 Stocks Have Gotten Sliced in Half This Year   [Sep-09-17 10:31AM  Motley Fool]
▶ Seadrill Stock Rose 43% Last Week   [Sep-08-17 02:35PM  Market Realist]
▶ Where Will Seadrill Partners LLC Be in 5 Years?   [Sep-05-17 11:11AM  Motley Fool]
▶ Seadrill Gives Its Outlook for Offshore Drilling Industry   [Sep-01-17 07:39AM  Market Realist]
▶ 3 Top Oil Stocks to Buy Right Now   [Aug-31-17 07:31PM  Motley Fool]
▶ Ensco plc Announces Cash Dividend   [Aug-29-17 04:30PM  Business Wire]
▶ Ensco plc Announces New Drillship Contract Award   [Aug-21-17 05:55PM  Business Wire]
Financial statements of ESV
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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