Intrinsic value of Janus Henderson Group plc - JHG

Previous Close

$21.53

  Intrinsic Value

$56.42

stock screener

  Rating & Target

str. buy

+162%

Previous close

$21.53

 
Intrinsic value

$56.42

 
Up/down potential

+162%

 
Rating

str. buy

We calculate the intrinsic value of JHG 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 4.2

 

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, %
  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
  2,352
  2,406
  2,468
  2,537
  2,614
  2,699
  2,791
  2,890
  2,997
  3,112
  3,236
  3,367
  3,507
  3,655
  3,813
  3,980
  4,157
  4,344
  4,542
  4,750
  4,970
  5,203
  5,447
  5,705
  5,977
  6,263
  6,564
  6,881
  7,214
  7,564
Variable operating expenses, $m
  1,343
  1,364
  1,387
  1,413
  1,442
  1,473
  1,508
  1,545
  1,586
  1,629
  1,215
  1,264
  1,317
  1,372
  1,432
  1,494
  1,561
  1,631
  1,705
  1,784
  1,866
  1,953
  2,045
  2,142
  2,244
  2,352
  2,465
  2,584
  2,709
  2,840
Fixed operating expenses, $m
  344
  352
  360
  368
  376
  384
  392
  401
  410
  419
  428
  438
  447
  457
  467
  477
  488
  499
  510
  521
  532
  544
  556
  568
  581
  593
  606
  620
  633
  647
Total operating expenses, $m
  1,687
  1,716
  1,747
  1,781
  1,818
  1,857
  1,900
  1,946
  1,996
  2,048
  1,643
  1,702
  1,764
  1,829
  1,899
  1,971
  2,049
  2,130
  2,215
  2,305
  2,398
  2,497
  2,601
  2,710
  2,825
  2,945
  3,071
  3,204
  3,342
  3,487
Operating income, $m
  664
  691
  722
  757
  797
  841
  890
  944
  1,002
  1,065
  1,593
  1,665
  1,743
  1,826
  1,914
  2,008
  2,108
  2,214
  2,327
  2,446
  2,572
  2,705
  2,846
  2,995
  3,152
  3,318
  3,493
  3,677
  3,872
  4,077
EBITDA, $m
  1,206
  1,234
  1,267
  1,305
  1,348
  1,395
  1,447
  1,504
  1,566
  1,633
  1,705
  1,782
  1,865
  1,953
  2,047
  2,147
  2,253
  2,365
  2,485
  2,611
  2,745
  2,886
  3,036
  3,193
  3,360
  3,536
  3,721
  3,917
  4,123
  4,340
Interest expense (income), $m
  0
  17
  19
  22
  25
  28
  32
  36
  41
  46
  51
  56
  62
  69
  75
  83
  90
  98
  107
  116
  126
  136
  147
  158
  170
  182
  195
  209
  224
  239
  255
Earnings before tax, $m
  647
  671
  699
  732
  768
  809
  854
  903
  956
  1,014
  1,536
  1,603
  1,674
  1,750
  1,831
  1,918
  2,010
  2,107
  2,211
  2,320
  2,436
  2,559
  2,688
  2,825
  2,970
  3,123
  3,284
  3,453
  3,633
  3,821
Tax expense, $m
  175
  181
  189
  198
  207
  218
  231
  244
  258
  274
  415
  433
  452
  473
  494
  518
  543
  569
  597
  626
  658
  691
  726
  763
  802
  843
  887
  932
  981
  1,032
Net income, $m
  472
  490
  511
  534
  561
  591
  623
  659
  698
  740
  1,121
  1,170
  1,222
  1,278
  1,337
  1,400
  1,467
  1,538
  1,614
  1,694
  1,778
  1,868
  1,962
  2,062
  2,168
  2,279
  2,397
  2,521
  2,652
  2,790

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
  6,272
  6,417
  6,581
  6,767
  6,972
  7,197
  7,442
  7,707
  7,993
  8,300
  8,628
  8,978
  9,351
  9,747
  10,168
  10,613
  11,085
  11,584
  12,111
  12,667
  13,254
  13,874
  14,526
  15,214
  15,938
  16,701
  17,504
  18,348
  19,237
  20,172
Adjusted assets (=assets-cash), $m
  6,272
  6,417
  6,581
  6,767
  6,972
  7,197
  7,442
  7,707
  7,993
  8,300
  8,628
  8,978
  9,351
  9,747
  10,168
  10,613
  11,085
  11,584
  12,111
  12,667
  13,254
  13,874
  14,526
  15,214
  15,938
  16,701
  17,504
  18,348
  19,237
  20,172
Revenue / Adjusted assets
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
  0.375
Average production assets, $m
  2,453
  2,510
  2,574
  2,647
  2,727
  2,815
  2,911
  3,015
  3,126
  3,246
  3,375
  3,512
  3,657
  3,812
  3,977
  4,151
  4,336
  4,531
  4,737
  4,954
  5,184
  5,426
  5,682
  5,951
  6,234
  6,532
  6,846
  7,176
  7,524
  7,890
Working capital, $m
  -205
  -209
  -215
  -221
  -227
  -235
  -243
  -251
  -261
  -271
  -281
  -293
  -305
  -318
  -332
  -346
  -362
  -378
  -395
  -413
  -432
  -453
  -474
  -496
  -520
  -545
  -571
  -599
  -628
  -658
Total debt, $m
  360
  409
  464
  527
  596
  672
  754
  844
  940
  1,044
  1,154
  1,272
  1,398
  1,531
  1,673
  1,823
  1,982
  2,150
  2,328
  2,515
  2,713
  2,922
  3,142
  3,374
  3,618
  3,875
  4,145
  4,430
  4,729
  5,044
Total liabilities, $m
  2,114
  2,162
  2,218
  2,280
  2,349
  2,425
  2,508
  2,597
  2,694
  2,797
  2,908
  3,026
  3,151
  3,285
  3,427
  3,577
  3,736
  3,904
  4,081
  4,269
  4,467
  4,675
  4,895
  5,127
  5,371
  5,628
  5,899
  6,183
  6,483
  6,798
Total equity, $m
  4,159
  4,254
  4,364
  4,486
  4,622
  4,772
  4,934
  5,110
  5,299
  5,503
  5,720
  5,953
  6,200
  6,462
  6,741
  7,037
  7,349
  7,680
  8,029
  8,398
  8,788
  9,198
  9,631
  10,087
  10,567
  11,073
  11,605
  12,165
  12,754
  13,374
Total liabilities and equity, $m
  6,273
  6,416
  6,582
  6,766
  6,971
  7,197
  7,442
  7,707
  7,993
  8,300
  8,628
  8,979
  9,351
  9,747
  10,168
  10,614
  11,085
  11,584
  12,110
  12,667
  13,255
  13,873
  14,526
  15,214
  15,938
  16,701
  17,504
  18,348
  19,237
  20,172
Debt-to-equity ratio
  0.090
  0.100
  0.110
  0.120
  0.130
  0.140
  0.150
  0.170
  0.180
  0.190
  0.200
  0.210
  0.230
  0.240
  0.250
  0.260
  0.270
  0.280
  0.290
  0.300
  0.310
  0.320
  0.330
  0.330
  0.340
  0.350
  0.360
  0.360
  0.370
  0.380
Adjusted equity ratio
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663
  0.663

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  472
  490
  511
  534
  561
  591
  623
  659
  698
  740
  1,121
  1,170
  1,222
  1,278
  1,337
  1,400
  1,467
  1,538
  1,614
  1,694
  1,778
  1,868
  1,962
  2,062
  2,168
  2,279
  2,397
  2,521
  2,652
  2,790
Depreciation, amort., depletion, $m
  542
  544
  546
  548
  551
  554
  557
  561
  564
  568
  112
  117
  122
  127
  133
  138
  145
  151
  158
  165
  173
  181
  189
  198
  208
  218
  228
  239
  251
  263
Funds from operations, $m
  1,014
  1,034
  1,057
  1,083
  1,112
  1,145
  1,181
  1,220
  1,262
  1,309
  1,234
  1,287
  1,344
  1,405
  1,470
  1,538
  1,612
  1,689
  1,772
  1,859
  1,951
  2,049
  2,152
  2,261
  2,376
  2,497
  2,625
  2,760
  2,903
  3,053
Change in working capital, $m
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -30
Cash from operations, $m
  1,018
  1,038
  1,062
  1,089
  1,119
  1,152
  1,189
  1,228
  1,272
  1,319
  1,245
  1,299
  1,356
  1,418
  1,483
  1,553
  1,627
  1,706
  1,789
  1,877
  1,970
  2,069
  2,173
  2,283
  2,399
  2,522
  2,651
  2,788
  2,932
  3,083
Maintenance CAPEX, $m
  -80
  -82
  -84
  -86
  -88
  -91
  -94
  -97
  -100
  -104
  -108
  -112
  -117
  -122
  -127
  -133
  -138
  -145
  -151
  -158
  -165
  -173
  -181
  -189
  -198
  -208
  -218
  -228
  -239
  -251
New CAPEX, $m
  -48
  -56
  -64
  -72
  -80
  -88
  -96
  -104
  -112
  -120
  -128
  -137
  -146
  -155
  -164
  -174
  -184
  -195
  -206
  -218
  -230
  -242
  -255
  -269
  -283
  -298
  -314
  -330
  -348
  -366
Cash from investing activities, $m
  -128
  -138
  -148
  -158
  -168
  -179
  -190
  -201
  -212
  -224
  -236
  -249
  -263
  -277
  -291
  -307
  -322
  -340
  -357
  -376
  -395
  -415
  -436
  -458
  -481
  -506
  -532
  -558
  -587
  -617
Free cash flow, $m
  890
  900
  914
  930
  950
  973
  999
  1,028
  1,060
  1,094
  1,008
  1,049
  1,093
  1,141
  1,192
  1,246
  1,304
  1,366
  1,432
  1,501
  1,575
  1,654
  1,737
  1,825
  1,918
  2,016
  2,120
  2,229
  2,345
  2,467
Issuance/(repayment) of debt, $m
  41
  49
  56
  62
  69
  76
  83
  89
  96
  103
  111
  118
  126
  134
  142
  150
  159
  168
  178
  188
  198
  209
  220
  232
  244
  257
  271
  285
  299
  315
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  41
  49
  56
  62
  69
  76
  83
  89
  96
  103
  111
  118
  126
  134
  142
  150
  159
  168
  178
  188
  198
  209
  220
  232
  244
  257
  271
  285
  299
  315
Total cash flow (excl. dividends), $m
  931
  949
  969
  993
  1,019
  1,049
  1,081
  1,117
  1,156
  1,198
  1,119
  1,167
  1,219
  1,274
  1,333
  1,396
  1,463
  1,534
  1,609
  1,689
  1,773
  1,863
  1,957
  2,057
  2,162
  2,273
  2,390
  2,514
  2,644
  2,782
Retained Cash Flow (-), $m
  -82
  -96
  -109
  -123
  -136
  -149
  -163
  -176
  -190
  -203
  -218
  -232
  -247
  -263
  -279
  -295
  -313
  -331
  -349
  -369
  -389
  -411
  -433
  -456
  -480
  -506
  -532
  -560
  -589
  -620
Prev. year cash balance distribution, $m
  763
  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
  1,612
  853
  860
  870
  883
  900
  919
  941
  966
  994
  901
  935
  972
  1,012
  1,055
  1,101
  1,150
  1,203
  1,260
  1,320
  1,384
  1,452
  1,524
  1,601
  1,682
  1,767
  1,858
  1,954
  2,055
  2,162
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
  1,545
  781
  748
  716
  685
  653
  621
  588
  555
  521
  428
  399
  369
  340
  310
  280
  250
  222
  194
  168
  143
  120
  100
  82
  65
  52
  40
  30
  22
  16
Current shareholders' claim on cash, %
  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

FINANCIAL RATIOS  of  Janus Henderson Group plc (JHG)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

JHG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JHG stock intrinsic value calculation we used $2306 million for the last fiscal year's total revenue generated by Janus Henderson Group plc. The default revenue input number comes from 0001 income statement of Janus Henderson Group plc. 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 JHG 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 4.3%, whose default value for JHG is calculated based on our internal credit rating of Janus Henderson Group plc, 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 Janus Henderson Group plc.
    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 JHG stock the variable cost ratio is equal to 57.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $337 million in the base year in the intrinsic value calculation for JHG 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 5.4% for Janus Henderson Group plc.

Corporate tax rate of 27% is the nominal tax rate for Janus Henderson Group plc. 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 JHG 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 JHG are equal to 104.3%.

Life of production assets of 67.9 years is the average useful life of capital assets used in Janus Henderson Group plc 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 JHG 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 - $4839.3 million for Janus Henderson Group plc - 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 196.371 million for Janus Henderson Group plc 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 Janus Henderson Group plc at the current share price and the inputted number of shares is $4.2 billion.

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