Intrinsic value of Mylan - MYL

Previous Close

$35.53

  Intrinsic Value

$62.31

stock screener

  Rating & Target

str. buy

+75%

Previous close

$35.53

 
Intrinsic value

$62.31

 
Up/down potential

+75%

 
Rating

str. buy

We calculate the intrinsic value of MYL 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 2017), $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 19.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.50
  7.25
  7.02
  6.82
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
  5.87
  5.78
  5.71
  5.64
  5.57
  5.51
  5.46
  5.42
  5.38
  5.34
  5.30
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
Revenue, $m
  12,801
  13,729
  14,694
  15,696
  16,738
  17,822
  18,950
  20,124
  21,347
  22,621
  23,950
  25,335
  26,781
  28,290
  29,866
  31,513
  33,235
  35,035
  36,918
  38,889
  40,952
  43,111
  45,373
  47,742
  50,224
  52,826
  55,552
  58,411
  61,408
  64,550
Variable operating expenses, $m
  2,203
  2,178
  2,152
  2,126
  2,098
  2,069
  2,038
  2,007
  1,974
  1,940
  -640
  -677
  -716
  -756
  -799
  -843
  -889
  -937
  -987
  -1,040
  -1,095
  -1,153
  -1,213
  -1,277
  -1,343
  -1,412
  -1,485
  -1,562
  -1,642
  -1,726
Fixed operating expenses, $m
  8,670
  8,860
  9,055
  9,255
  9,458
  9,666
  9,879
  10,096
  10,318
  10,545
  10,777
  11,014
  11,257
  11,504
  11,757
  12,016
  12,280
  12,551
  12,827
  13,109
  13,397
  13,692
  13,993
  14,301
  14,616
  14,937
  15,266
  15,602
  15,945
  16,296
Total operating expenses, $m
  10,873
  11,038
  11,207
  11,381
  11,556
  11,735
  11,917
  12,103
  12,292
  12,485
  10,137
  10,337
  10,541
  10,748
  10,958
  11,173
  11,391
  11,614
  11,840
  12,069
  12,302
  12,539
  12,780
  13,024
  13,273
  13,525
  13,781
  14,040
  14,303
  14,570
Operating income, $m
  1,929
  2,691
  3,486
  4,316
  5,183
  6,088
  7,033
  8,021
  9,055
  10,136
  13,813
  14,998
  16,240
  17,542
  18,907
  20,340
  21,843
  23,421
  25,079
  26,820
  28,649
  30,572
  32,593
  34,717
  36,951
  39,301
  41,772
  44,371
  47,105
  49,980
EBITDA, $m
  7,366
  8,337
  9,351
  10,407
  11,509
  12,659
  13,859
  15,112
  16,422
  17,791
  19,223
  20,721
  22,290
  23,933
  25,654
  27,458
  29,351
  31,336
  33,419
  35,605
  37,900
  40,311
  42,842
  45,502
  48,297
  51,234
  54,321
  57,566
  60,977
  64,562
Interest expense (income), $m
  0
  795
  884
  978
  1,076
  1,178
  1,285
  1,395
  1,510
  1,629
  1,754
  1,884
  2,019
  2,160
  2,307
  2,461
  2,622
  2,789
  2,965
  3,148
  3,340
  3,540
  3,750
  3,970
  4,201
  4,442
  4,695
  4,960
  5,237
  5,528
  5,834
Earnings before tax, $m
  1,134
  1,807
  2,508
  3,240
  4,004
  4,803
  5,638
  6,511
  7,425
  8,382
  11,929
  12,979
  14,080
  15,235
  16,446
  17,718
  19,054
  20,457
  21,931
  23,480
  25,109
  26,821
  28,622
  30,517
  32,510
  34,606
  36,812
  39,133
  41,576
  44,147
Tax expense, $m
  306
  488
  677
  875
  1,081
  1,297
  1,522
  1,758
  2,005
  2,263
  3,221
  3,504
  3,802
  4,113
  4,440
  4,784
  5,145
  5,523
  5,921
  6,340
  6,779
  7,242
  7,728
  8,240
  8,778
  9,344
  9,939
  10,566
  11,226
  11,920
Net income, $m
  828
  1,319
  1,831
  2,365
  2,923
  3,506
  4,116
  4,753
  5,420
  6,119
  8,708
  9,475
  10,278
  11,121
  12,006
  12,934
  13,909
  14,933
  16,009
  17,140
  18,329
  19,580
  20,894
  22,277
  23,732
  25,262
  26,873
  28,567
  30,351
  32,227

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
  38,442
  41,229
  44,125
  47,136
  50,265
  53,521
  56,908
  60,434
  64,106
  67,932
  71,921
  76,081
  80,422
  84,954
  89,688
  94,634
  99,804
  105,210
  110,866
  116,783
  122,978
  129,463
  136,255
  143,369
  150,824
  158,636
  166,824
  175,407
  184,407
  193,845
Adjusted assets (=assets-cash), $m
  38,442
  41,229
  44,125
  47,136
  50,265
  53,521
  56,908
  60,434
  64,106
  67,932
  71,921
  76,081
  80,422
  84,954
  89,688
  94,634
  99,804
  105,210
  110,866
  116,783
  122,978
  129,463
  136,255
  143,369
  150,824
  158,636
  166,824
  175,407
  184,407
  193,845
Revenue / Adjusted assets
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
Average production assets, $m
  28,918
  31,014
  33,193
  35,458
  37,812
  40,261
  42,809
  45,461
  48,223
  51,102
  54,102
  57,232
  60,497
  63,907
  67,468
  71,188
  75,077
  79,144
  83,398
  87,850
  92,510
  97,388
  102,497
  107,849
  113,457
  119,333
  125,493
  131,950
  138,720
  145,819
Working capital, $m
  1,178
  1,263
  1,352
  1,444
  1,540
  1,640
  1,743
  1,851
  1,964
  2,081
  2,203
  2,331
  2,464
  2,603
  2,748
  2,899
  3,058
  3,223
  3,396
  3,578
  3,768
  3,966
  4,174
  4,392
  4,621
  4,860
  5,111
  5,374
  5,649
  5,939
Total debt, $m
  16,364
  18,114
  19,933
  21,824
  23,789
  25,833
  27,961
  30,175
  32,481
  34,884
  37,389
  40,001
  42,728
  45,574
  48,546
  51,653
  54,899
  58,295
  61,846
  65,562
  69,452
  73,525
  77,790
  82,258
  86,940
  91,846
  96,988
  102,378
  108,030
  113,957
Total liabilities, $m
  24,141
  25,892
  27,711
  29,601
  31,567
  33,611
  35,738
  37,952
  40,258
  42,661
  45,166
  47,779
  50,505
  53,351
  56,324
  59,430
  62,677
  66,072
  69,624
  73,340
  77,230
  81,303
  85,568
  90,036
  94,717
  99,623
  104,765
  110,156
  115,808
  121,734
Total equity, $m
  14,300
  15,337
  16,415
  17,534
  18,699
  19,910
  21,170
  22,481
  23,847
  25,271
  26,755
  28,302
  29,917
  31,603
  33,364
  35,204
  37,127
  39,138
  41,242
  43,443
  45,748
  48,160
  50,687
  53,333
  56,106
  59,012
  62,058
  65,252
  68,599
  72,110
Total liabilities and equity, $m
  38,441
  41,229
  44,126
  47,135
  50,266
  53,521
  56,908
  60,433
  64,105
  67,932
  71,921
  76,081
  80,422
  84,954
  89,688
  94,634
  99,804
  105,210
  110,866
  116,783
  122,978
  129,463
  136,255
  143,369
  150,823
  158,635
  166,823
  175,408
  184,407
  193,844
Debt-to-equity ratio
  1.140
  1.180
  1.210
  1.240
  1.270
  1.300
  1.320
  1.340
  1.360
  1.380
  1.400
  1.410
  1.430
  1.440
  1.460
  1.470
  1.480
  1.490
  1.500
  1.510
  1.520
  1.530
  1.530
  1.540
  1.550
  1.560
  1.560
  1.570
  1.570
  1.580
Adjusted equity ratio
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372
  0.372

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  828
  1,319
  1,831
  2,365
  2,923
  3,506
  4,116
  4,753
  5,420
  6,119
  8,708
  9,475
  10,278
  11,121
  12,006
  12,934
  13,909
  14,933
  16,009
  17,140
  18,329
  19,580
  20,894
  22,277
  23,732
  25,262
  26,873
  28,567
  30,351
  32,227
Depreciation, amort., depletion, $m
  5,437
  5,647
  5,864
  6,091
  6,326
  6,571
  6,826
  7,091
  7,368
  7,655
  5,410
  5,723
  6,050
  6,391
  6,747
  7,119
  7,508
  7,914
  8,340
  8,785
  9,251
  9,739
  10,250
  10,785
  11,346
  11,933
  12,549
  13,195
  13,872
  14,582
Funds from operations, $m
  6,265
  6,966
  7,695
  8,456
  9,249
  10,077
  10,942
  11,845
  12,788
  13,774
  14,118
  15,198
  16,328
  17,512
  18,753
  20,053
  21,417
  22,848
  24,349
  25,925
  27,580
  29,318
  31,144
  33,062
  35,078
  37,196
  39,422
  41,762
  44,223
  46,809
Change in working capital, $m
  82
  85
  89
  92
  96
  100
  104
  108
  112
  117
  122
  127
  133
  139
  145
  152
  158
  166
  173
  181
  190
  199
  208
  218
  228
  239
  251
  263
  276
  289
Cash from operations, $m
  6,182
  6,880
  7,607
  8,364
  9,154
  9,978
  10,838
  11,737
  12,675
  13,657
  13,996
  15,070
  16,195
  17,373
  18,607
  19,902
  21,259
  22,682
  24,176
  25,744
  27,391
  29,120
  30,936
  32,844
  34,849
  36,956
  39,171
  41,499
  43,947
  46,520
Maintenance CAPEX, $m
  -2,690
  -2,892
  -3,101
  -3,319
  -3,546
  -3,781
  -4,026
  -4,281
  -4,546
  -4,822
  -5,110
  -5,410
  -5,723
  -6,050
  -6,391
  -6,747
  -7,119
  -7,508
  -7,914
  -8,340
  -8,785
  -9,251
  -9,739
  -10,250
  -10,785
  -11,346
  -11,933
  -12,549
  -13,195
  -13,872
New CAPEX, $m
  -2,021
  -2,097
  -2,179
  -2,265
  -2,354
  -2,449
  -2,548
  -2,652
  -2,762
  -2,878
  -3,001
  -3,130
  -3,266
  -3,409
  -3,561
  -3,721
  -3,889
  -4,067
  -4,254
  -4,452
  -4,660
  -4,879
  -5,109
  -5,352
  -5,608
  -5,876
  -6,159
  -6,457
  -6,770
  -7,099
Cash from investing activities, $m
  -4,711
  -4,989
  -5,280
  -5,584
  -5,900
  -6,230
  -6,574
  -6,933
  -7,308
  -7,700
  -8,111
  -8,540
  -8,989
  -9,459
  -9,952
  -10,468
  -11,008
  -11,575
  -12,168
  -12,792
  -13,445
  -14,130
  -14,848
  -15,602
  -16,393
  -17,222
  -18,092
  -19,006
  -19,965
  -20,971
Free cash flow, $m
  1,471
  1,892
  2,326
  2,780
  3,253
  3,748
  4,264
  4,803
  5,367
  5,956
  5,885
  6,531
  7,206
  7,914
  8,656
  9,434
  10,251
  11,108
  12,007
  12,953
  13,946
  14,990
  16,088
  17,242
  18,457
  19,734
  21,078
  22,493
  23,982
  25,549
Issuance/(repayment) of debt, $m
  1,643
  1,750
  1,819
  1,891
  1,966
  2,044
  2,127
  2,214
  2,306
  2,403
  2,505
  2,613
  2,726
  2,846
  2,973
  3,106
  3,247
  3,395
  3,552
  3,716
  3,890
  4,073
  4,265
  4,468
  4,681
  4,906
  5,142
  5,391
  5,652
  5,927
Issuance/(repurchase) of shares, $m
  165
  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  
  1,808
  1,750
  1,819
  1,891
  1,966
  2,044
  2,127
  2,214
  2,306
  2,403
  2,505
  2,613
  2,726
  2,846
  2,973
  3,106
  3,247
  3,395
  3,552
  3,716
  3,890
  4,073
  4,265
  4,468
  4,681
  4,906
  5,142
  5,391
  5,652
  5,927
Total cash flow (excl. dividends), $m
  3,279
  3,642
  4,145
  4,670
  5,219
  5,792
  6,391
  7,018
  7,673
  8,359
  8,390
  9,143
  9,933
  10,760
  11,629
  12,540
  13,497
  14,503
  15,559
  16,669
  17,836
  19,063
  20,353
  21,710
  23,138
  24,640
  26,221
  27,884
  29,634
  31,475
Retained Cash Flow (-), $m
  -992
  -1,037
  -1,077
  -1,120
  -1,164
  -1,211
  -1,260
  -1,312
  -1,366
  -1,423
  -1,484
  -1,548
  -1,615
  -1,686
  -1,761
  -1,840
  -1,923
  -2,011
  -2,104
  -2,201
  -2,304
  -2,413
  -2,527
  -2,647
  -2,773
  -2,906
  -3,046
  -3,193
  -3,348
  -3,511
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  71
  77
  82
  88
  94
  100
  107
  114
  121
  128
  136
  144
  152
  161
  170
  179
  189
  199
  210
  222
  233
  246
  259
  272
  286
  301
  317
  333
  350
  368
Cash available for distribution, $m
  2,287
  2,606
  3,068
  3,551
  4,055
  4,581
  5,131
  5,706
  6,307
  6,936
  6,907
  7,596
  8,318
  9,074
  9,868
  10,700
  11,574
  12,492
  13,455
  14,468
  15,532
  16,650
  17,827
  19,064
  20,365
  21,734
  23,175
  24,690
  26,286
  27,965
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  2,112
  2,205
  2,359
  2,460
  2,507
  2,504
  2,452
  2,358
  2,227
  2,066
  1,712
  1,544
  1,366
  1,185
  1,007
  838
  683
  544
  423
  321
  238
  171
  120
  82
  54
  35
  22
  13
  7
  4
Current shareholders' claim on cash, %
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1
  99.1

Mylan N.V., together with its subsidiaries, develops, licenses, manufactures, markets, and distributes generic, branded generic, and specialty pharmaceuticals worldwide. The company provides generic or branded generic pharmaceutical products in tablet, capsule, injectable, transdermal patch, gel, cream, or ointment forms, as well as active pharmaceutical ingredients (APIs). It is also involved in the development of APIs with non-infringing processes for internal use and to partner with manufacturers; and manufacture and sale of injectable products in antineoplastics, anti-infectives, anesthesia/pain management, and cardiovascular therapeutic areas. In addition, the company produces finished dosage form and oral solid dose products; and offers antiretroviral therapies to third parties. Further, it manufactures and sells branded specialty injectable and nebulized products comprising EpiPen Auto-Injector to treat severe allergic reactions; Perforomist Inhalation Solution, a formoterol fumarate inhalation solution for the maintenance treatment of bronchoconstriction in chronic obstructive pulmonary disorder patients; and ULTIVA, an analgesic agent used during the induction and maintenance of general anesthesia for inpatient and outpatient procedures. It sells generic pharmaceutical products to proprietary and ethical pharmaceutical wholesalers and distributors, group purchasing organizations, drug store chains, independent pharmacies, drug manufacturers, institutions, and public and governmental agencies; and specialty pharmaceuticals to pharmaceutical wholesalers and distributors, pharmacies, and healthcare institutions. Mylan N.V. has a collaboration agreement with Momenta Pharmaceuticals, Inc. to develop, manufacture, and commercialize Momenta Pharmaceuticals, Inc.’s biosimilar candidates. The company was formerly known as New Moon B.V. Mylan N.V. was founded in 1961 and is based in Hertfordshire, the United Kingdom.

FINANCIAL RATIOS  of  Mylan (MYL)

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%

MYL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MYL stock intrinsic value calculation we used $11908 million for the last fiscal year's total revenue generated by Mylan. The default revenue input number comes from 2017 income statement of Mylan. 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 MYL stock valuation model: a) initial revenue growth rate of 7.5% 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 8.3%, whose default value for MYL is calculated based on our internal credit rating of Mylan, 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 Mylan.
    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 MYL stock the variable cost ratio is equal to 18.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8483 million in the base year in the intrinsic value calculation for MYL 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 Mylan.

Corporate tax rate of 27% is the nominal tax rate for Mylan. 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 MYL stock is equal to 0.6%.

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 MYL are equal to 225.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Mylan 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 MYL is equal to 9.2%. 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 - $13308 million for Mylan - 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 535 million for Mylan 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 Mylan at the current share price and the inputted number of shares is $19.0 billion.

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COMPANY NEWS

▶ Mylan Stock Looks Cheap, but Dont Overlook These Risks   [Jun-21-18 12:12PM  InvestorPlace]
▶ Mylan Launches Generic Angiomax® Injection   [Jun-18-18 02:07PM  PR Newswire]
▶ Options Traders: Watch These Two Stocks   [01:33PM  CNBC Videos]
▶ Mylan, ServiceNow, FactSet & biotech   [01:26PM  CNBC Videos]
▶ Company News For Jun 15, 2018   [10:12AM  Zacks]
▶ FDA clears 1st generic film strip of addiction drug Suboxone   [Jun-14-18 06:50PM  Associated Press]
▶ After-hours buzz: TLRD, MYL & more   [Jun-13-18 06:06PM  CNBC]
▶ Mylan CEO on FDA-approved biosimilar, Trump's drug price plan   [Jun-12-18 09:06AM  CBS News Videos]
▶ Americares Honors Mylan with Power of Partnership Award   [Jun-11-18 03:29PM  PR Newswire]
▶ Company News For Jun 6, 2018   [Jun-06-18 10:08AM  Zacks]
▶ Mylan Spikes After FDA Approves Its Knockoff Of Amgen's Drug   [04:51PM  Investor's Business Daily]
▶ Watch Out Amgen, Here Comes Mylan   [03:00PM  Motley Fool]
▶ Stocks Mixed; Twitter, Mylan, Apple In Motion; Oil Dives   [09:40AM  Investor's Business Daily]
▶ FDA Moves to Make Life Easier for Generic Drug Companies   [May-31-18 06:46PM  TheStreet.com]
▶ [$$] Investors, Brace Yourselves for More Drug-Price Drama   [11:29AM  The Wall Street Journal]
▶ Momenta Pharmaceuticals Contemplates Its Future   [May-15-18 01:49PM  Motley Fool]
▶ Valeant: Turning Around or Just Spinning?   [11:00AM  Barrons.com]
▶ Department of Justice seeks information from Mylan   [08:27AM  American City Business Journals]
▶ Big pharma stocks unfazed by Trump speech   [May-11-18 04:23PM  Fox Business Videos]
▶ [$$] Mylan May Be Gem in Rough Generic Sector   [01:16AM  The Wall Street Journal]
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