Intrinsic value of Novo Nordisk ADR - NVO

Previous Close

$43.57

  Intrinsic Value

$118.12

stock screener

  Rating & Target

str. buy

+171%

Previous close

$43.57

 
Intrinsic value

$118.12

 
Up/down potential

+171%

 
Rating

str. buy

We calculate the intrinsic value of NVO 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 8.9

 

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, %
  13.80
  12.92
  12.13
  11.42
  10.77
  10.20
  9.68
  9.21
  8.79
  8.41
  8.07
  7.76
  7.49
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
  5.96
  5.87
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
Revenue, $m
  20,495
  23,143
  25,950
  28,912
  32,027
  35,292
  38,708
  42,272
  45,987
  49,854
  53,877
  58,058
  62,404
  66,920
  71,613
  76,492
  81,564
  86,839
  92,328
  98,042
  103,993
  110,194
  116,658
  123,401
  130,437
  137,783
  145,456
  153,473
  161,853
  170,617
Variable operating expenses, $m
  10,752
  12,135
  13,600
  15,146
  16,772
  18,477
  20,260
  22,121
  24,060
  26,079
  28,125
  30,308
  32,576
  34,934
  37,384
  39,930
  42,578
  45,332
  48,197
  51,180
  54,287
  57,524
  60,898
  64,418
  68,091
  71,926
  75,931
  80,116
  84,491
  89,066
Fixed operating expenses, $m
  697
  712
  728
  744
  760
  777
  794
  812
  830
  848
  866
  886
  905
  925
  945
  966
  987
  1,009
  1,031
  1,054
  1,077
  1,101
  1,125
  1,150
  1,175
  1,201
  1,227
  1,254
  1,282
  1,310
Total operating expenses, $m
  11,449
  12,847
  14,328
  15,890
  17,532
  19,254
  21,054
  22,933
  24,890
  26,927
  28,991
  31,194
  33,481
  35,859
  38,329
  40,896
  43,565
  46,341
  49,228
  52,234
  55,364
  58,625
  62,023
  65,568
  69,266
  73,127
  77,158
  81,370
  85,773
  90,376
Operating income, $m
  9,046
  10,296
  11,622
  13,022
  14,494
  16,038
  17,653
  19,340
  21,098
  22,928
  24,885
  26,865
  28,923
  31,061
  33,284
  35,595
  37,998
  40,498
  43,099
  45,808
  48,629
  51,569
  54,635
  57,833
  61,171
  64,656
  68,297
  72,102
  76,080
  80,241
EBITDA, $m
  9,658
  10,980
  12,383
  13,863
  15,421
  17,054
  18,762
  20,546
  22,405
  24,341
  26,354
  28,448
  30,624
  32,886
  35,237
  37,681
  40,222
  42,865
  45,617
  48,481
  51,464
  54,574
  57,816
  61,197
  64,727
  68,413
  72,263
  76,286
  80,493
  84,893
Interest expense (income), $m
  9
  442
  2,328
  4,342
  6,478
  8,731
  11,101
  13,586
  16,184
  18,896
  21,722
  24,664
  27,725
  30,906
  34,212
  37,648
  41,219
  44,930
  48,789
  52,802
  56,978
  61,325
  65,853
  70,571
  75,489
  80,619
  85,972
  91,561
  97,398
  103,497
  109,873
Earnings before tax, $m
  8,604
  7,968
  7,279
  6,544
  5,763
  4,937
  4,068
  3,156
  2,202
  1,206
  221
  -860
  -1,983
  -3,151
  -4,364
  -5,624
  -6,932
  -8,291
  -9,703
  -11,170
  -12,696
  -14,284
  -15,936
  -17,656
  -19,448
  -21,316
  -23,264
  -25,296
  -27,417
  -29,633
Tax expense, $m
  2,323
  2,151
  1,965
  1,767
  1,556
  1,333
  1,098
  852
  594
  326
  60
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  6,281
  5,817
  5,314
  4,777
  4,207
  3,604
  2,970
  2,304
  1,607
  880
  161
  -860
  -1,983
  -3,151
  -4,364
  -5,624
  -6,932
  -8,291
  -9,703
  -11,170
  -12,696
  -14,284
  -15,936
  -17,656
  -19,448
  -21,316
  -23,264
  -25,296
  -27,417
  -29,633

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
  18,786
  21,213
  23,785
  26,500
  29,355
  32,349
  35,479
  38,746
  42,151
  45,696
  49,383
  53,216
  57,199
  61,338
  65,640
  70,112
  74,760
  79,596
  84,627
  89,864
  95,319
  101,002
  106,928
  113,108
  119,558
  126,291
  133,323
  140,672
  148,353
  156,386
Adjusted assets (=assets-cash), $m
  18,786
  21,213
  23,785
  26,500
  29,355
  32,349
  35,479
  38,746
  42,151
  45,696
  49,383
  53,216
  57,199
  61,338
  65,640
  70,112
  74,760
  79,596
  84,627
  89,864
  95,319
  101,002
  106,928
  113,108
  119,558
  126,291
  133,323
  140,672
  148,353
  156,386
Revenue / Adjusted assets
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
  1.091
Average production assets, $m
  5,923
  6,688
  7,499
  8,356
  9,256
  10,200
  11,186
  12,217
  13,290
  14,408
  15,570
  16,779
  18,035
  19,340
  20,696
  22,106
  23,572
  25,096
  26,683
  28,334
  30,054
  31,846
  33,714
  35,663
  37,696
  39,819
  42,037
  44,354
  46,776
  49,308
Working capital, $m
  -758
  -856
  -960
  -1,070
  -1,185
  -1,306
  -1,432
  -1,564
  -1,702
  -1,845
  -1,993
  -2,148
  -2,309
  -2,476
  -2,650
  -2,830
  -3,018
  -3,213
  -3,416
  -3,628
  -3,848
  -4,077
  -4,316
  -4,566
  -4,826
  -5,098
  -5,382
  -5,678
  -5,989
  -6,313
Total debt, $m
  1,439
  2,684
  4,004
  5,396
  6,861
  8,397
  10,002
  11,678
  13,425
  15,244
  17,135
  19,101
  21,145
  23,268
  25,475
  27,769
  30,154
  32,634
  35,215
  37,902
  40,700
  43,616
  46,656
  49,826
  53,135
  56,589
  60,197
  63,966
  67,907
  72,028
Total liabilities, $m
  9,637
  10,882
  12,202
  13,595
  15,059
  16,595
  18,201
  19,877
  21,624
  23,442
  25,333
  27,300
  29,343
  31,467
  33,673
  35,967
  38,352
  40,833
  43,413
  46,100
  48,898
  51,814
  54,854
  58,024
  61,333
  64,787
  68,395
  72,165
  76,105
  80,226
Total equity, $m
  9,149
  10,331
  11,583
  12,906
  14,296
  15,754
  17,278
  18,869
  20,528
  22,254
  24,049
  25,916
  27,856
  29,872
  31,967
  34,144
  36,408
  38,763
  41,213
  43,764
  46,420
  49,188
  52,074
  55,084
  58,225
  61,504
  64,928
  68,507
  72,248
  76,160
Total liabilities and equity, $m
  18,786
  21,213
  23,785
  26,501
  29,355
  32,349
  35,479
  38,746
  42,152
  45,696
  49,382
  53,216
  57,199
  61,339
  65,640
  70,111
  74,760
  79,596
  84,626
  89,864
  95,318
  101,002
  106,928
  113,108
  119,558
  126,291
  133,323
  140,672
  148,353
  156,386
Debt-to-equity ratio
  0.160
  0.260
  0.350
  0.420
  0.480
  0.530
  0.580
  0.620
  0.650
  0.680
  0.710
  0.740
  0.760
  0.780
  0.800
  0.810
  0.830
  0.840
  0.850
  0.870
  0.880
  0.890
  0.900
  0.900
  0.910
  0.920
  0.930
  0.930
  0.940
  0.950
Adjusted equity ratio
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487
  0.487

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6,281
  5,817
  5,314
  4,777
  4,207
  3,604
  2,970
  2,304
  1,607
  880
  161
  -860
  -1,983
  -3,151
  -4,364
  -5,624
  -6,932
  -8,291
  -9,703
  -11,170
  -12,696
  -14,284
  -15,936
  -17,656
  -19,448
  -21,316
  -23,264
  -25,296
  -27,417
  -29,633
Depreciation, amort., depletion, $m
  612
  685
  761
  842
  927
  1,016
  1,109
  1,206
  1,307
  1,413
  1,469
  1,583
  1,701
  1,825
  1,952
  2,085
  2,224
  2,368
  2,517
  2,673
  2,835
  3,004
  3,181
  3,364
  3,556
  3,757
  3,966
  4,184
  4,413
  4,652
Funds from operations, $m
  6,893
  6,501
  6,075
  5,619
  5,134
  4,620
  4,078
  3,510
  2,915
  2,293
  1,630
  723
  -282
  -1,326
  -2,411
  -3,538
  -4,708
  -5,923
  -7,186
  -8,497
  -9,861
  -11,279
  -12,755
  -14,291
  -15,892
  -17,559
  -19,298
  -21,112
  -23,004
  -24,981
Change in working capital, $m
  -92
  -98
  -104
  -110
  -115
  -121
  -126
  -132
  -137
  -143
  -149
  -155
  -161
  -167
  -174
  -180
  -188
  -195
  -203
  -211
  -220
  -229
  -239
  -249
  -260
  -272
  -284
  -297
  -310
  -324
Cash from operations, $m
  6,985
  6,599
  6,179
  5,729
  5,249
  4,741
  4,205
  3,642
  3,052
  2,436
  1,779
  878
  -121
  -1,159
  -2,238
  -3,358
  -4,520
  -5,728
  -6,983
  -8,286
  -9,641
  -11,050
  -12,516
  -14,042
  -15,631
  -17,287
  -19,014
  -20,815
  -22,694
  -24,657
Maintenance CAPEX, $m
  -491
  -559
  -631
  -707
  -788
  -873
  -962
  -1,055
  -1,153
  -1,254
  -1,359
  -1,469
  -1,583
  -1,701
  -1,825
  -1,952
  -2,085
  -2,224
  -2,368
  -2,517
  -2,673
  -2,835
  -3,004
  -3,181
  -3,364
  -3,556
  -3,757
  -3,966
  -4,184
  -4,413
New CAPEX, $m
  -716
  -765
  -811
  -856
  -900
  -944
  -987
  -1,030
  -1,074
  -1,118
  -1,162
  -1,208
  -1,256
  -1,305
  -1,356
  -1,410
  -1,466
  -1,525
  -1,586
  -1,651
  -1,720
  -1,792
  -1,868
  -1,949
  -2,033
  -2,123
  -2,217
  -2,317
  -2,422
  -2,533
Cash from investing activities, $m
  -1,207
  -1,324
  -1,442
  -1,563
  -1,688
  -1,817
  -1,949
  -2,085
  -2,227
  -2,372
  -2,521
  -2,677
  -2,839
  -3,006
  -3,181
  -3,362
  -3,551
  -3,749
  -3,954
  -4,168
  -4,393
  -4,627
  -4,872
  -5,130
  -5,397
  -5,679
  -5,974
  -6,283
  -6,606
  -6,946
Free cash flow, $m
  5,778
  5,275
  4,737
  4,165
  3,560
  2,924
  2,256
  1,556
  826
  65
  -743
  -1,799
  -2,960
  -4,166
  -5,419
  -6,720
  -8,072
  -9,476
  -10,936
  -12,455
  -14,034
  -15,677
  -17,388
  -19,171
  -21,029
  -22,967
  -24,988
  -27,098
  -29,301
  -31,602
Issuance/(repayment) of debt, $m
  1,166
  1,245
  1,320
  1,393
  1,465
  1,536
  1,606
  1,676
  1,747
  1,818
  1,891
  1,966
  2,043
  2,124
  2,207
  2,294
  2,385
  2,480
  2,581
  2,687
  2,798
  2,916
  3,040
  3,171
  3,309
  3,454
  3,608
  3,770
  3,941
  4,121
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  51
  846
  1,634
  2,726
  3,923
  5,167
  6,459
  7,801
  9,196
  10,646
  12,153
  13,721
  15,353
  17,052
  18,821
  20,666
  22,589
  24,595
  26,688
  28,875
  31,158
  33,544
Cash from financing (excl. dividends), $m  
  1,166
  1,245
  1,320
  1,393
  1,465
  1,536
  1,606
  1,676
  1,798
  2,664
  3,525
  4,692
  5,966
  7,291
  8,666
  10,095
  11,581
  13,126
  14,734
  16,408
  18,151
  19,968
  21,861
  23,837
  25,898
  28,049
  30,296
  32,645
  35,099
  37,665
Total cash flow (excl. dividends), $m
  6,944
  6,520
  6,057
  5,558
  5,025
  4,459
  3,861
  3,232
  2,624
  2,729
  2,783
  2,893
  3,007
  3,124
  3,247
  3,375
  3,509
  3,650
  3,798
  3,953
  4,117
  4,290
  4,473
  4,665
  4,868
  5,082
  5,308
  5,547
  5,798
  6,063
Retained Cash Flow (-), $m
  -1,116
  -1,182
  -1,253
  -1,322
  -1,390
  -1,458
  -1,524
  -1,591
  -1,658
  -1,726
  -1,796
  -2,726
  -3,923
  -5,167
  -6,459
  -7,801
  -9,196
  -10,646
  -12,153
  -13,721
  -15,353
  -17,052
  -18,821
  -20,666
  -22,589
  -24,595
  -26,688
  -28,875
  -31,158
  -33,544
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
  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
  5,827
  5,338
  4,804
  4,236
  3,635
  3,002
  2,337
  1,641
  966
  1,003
  987
  167
  -916
  -2,042
  -3,212
  -4,426
  -5,687
  -6,996
  -8,355
  -9,768
  -11,236
  -12,761
  -14,349
  -16,001
  -17,721
  -19,512
  -21,380
  -23,328
  -25,360
  -27,481
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
  5,587
  4,887
  4,181
  3,488
  2,817
  2,178
  1,579
  1,026
  555
  526
  469
  71
  -348
  -686
  -943
  -1,125
  -1,237
  -1,288
  -1,287
  -1,241
  -1,162
  -1,059
  -940
  -815
  -689
  -569
  -459
  -361
  -277
  -207
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.8
  96.2
  90.2
  81.8
  71.9
  61.5
  51.5
  42.1
  33.9
  26.8
  20.8
  16.0
  12.1
  9.1
  6.8
  5.0
  3.6
  2.6
  1.9
  1.3
  0.9
  0.7

Novo Nordisk A/S is a global healthcare company engaged in diabetes care. The Company is also engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The Company operates through two business segments: diabetes and obesity care, and biopharmaceuticals. The Company's diabetes and obesity care segment covers insulin, GLP-1, other protein-related products, such as glucagon, protein-related delivery systems and needles, and oral anti-diabetic drugs. The Company's biopharmaceuticals segment covers the therapy areas of hemophilia care, growth hormone therapy and hormone replacement therapy. The Company also offers Saxenda product to treat obesity. It offers a range of products, including NovoLog/NovoRapid; NovoLog Mix/NovoMix; Prandin/NovoNorm; NovoSeven; Norditropin, and Vagifem. As of December 31, 2016, it marketed its products in over 180 countries. Its regional structure consists of two commercial units: North America and International Operations.

FINANCIAL RATIOS  of  Novo Nordisk ADR (NVO)

Valuation Ratios
P/E Ratio 20.3
Price to Sales 6.9
Price to Book 17
Price to Tangible Book
Price to Cash Flow 15.9
Price to Free Cash Flow 19.2
Growth Rates
Sales Growth Rate 3.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 29%
Cap. Spend. - 3 Yr. Gr. Rate 17.8%
Financial Strength
Quick Ratio 89
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0.5%
Interest Coverage 755
Management Effectiveness
Return On Assets 40.1%
Ret/ On Assets - 3 Yr. Avg. 39.2%
Return On Total Capital 81.1%
Ret/ On T. Cap. - 3 Yr. Avg. 74.2%
Return On Equity 82.2%
Return On Equity - 3 Yr. Avg. 75.3%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 84.6%
Gross Margin - 3 Yr. Avg. 84.4%
EBITDA Margin 45.7%
EBITDA Margin - 3 Yr. Avg. 43.7%
Operating Margin 43.3%
Oper. Margin - 3 Yr. Avg. 42.7%
Pre-Tax Margin 42.8%
Pre-Tax Margin - 3 Yr. Avg. 40.5%
Net Profit Margin 33.9%
Net Profit Margin - 3 Yr. Avg. 32%
Effective Tax Rate 20.7%
Eff/ Tax Rate - 3 Yr. Avg. 20.9%
Payout Ratio 62.8%

NVO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVO stock intrinsic value calculation we used $18009.6742986 million for the last fiscal year's total revenue generated by Novo Nordisk ADR. The default revenue input number comes from 0001 income statement of Novo Nordisk 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 NVO stock valuation model: a) initial revenue growth rate of 13.8% 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 NVO is calculated based on our internal credit rating of Novo Nordisk 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 Novo Nordisk 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 NVO stock the variable cost ratio is equal to 52.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $682 million in the base year in the intrinsic value calculation for NVO 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 161.8% for Novo Nordisk ADR.

Corporate tax rate of 27% is the nominal tax rate for Novo Nordisk 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 NVO 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 NVO are equal to 28.9%.

Life of production assets of 10.6 years is the average useful life of capital assets used in Novo Nordisk 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 NVO is equal to -3.7%. 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 - $8032.08642373 million for Novo Nordisk 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 203.346 million for Novo Nordisk 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 Novo Nordisk ADR at the current share price and the inputted number of shares is $8.9 billion.

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COMPANY NEWS

▶ Novo Nordisk A/S (NVO): Hedge Fund Sentiment Going Nowhere   [Nov-14-18 06:53AM  Insider Monkey]
▶ Novo Nordisk Continues Its Balancing Act   [Nov-08-18 02:53PM  Motley Fool]
▶ Novo Nordisk: 3Q Earnings Snapshot   [05:04AM  Associated Press]
▶ Q3 Earnings Preview For Novo Nordisk   [Oct-31-18 02:56PM  Benzinga]
▶ 5 Undervalued Companies With Predictable Businesses   [Oct-22-18 05:26PM  GuruFocus.com]
▶ 6 Companies Growing Their Book Value   [Oct-15-18 04:37PM  GuruFocus.com]
▶ 7 Healthcare Stocks to Buy Right Now   [Oct-04-18 02:24PM  InvestorPlace]
▶ Novo Nordisk to cut 250 jobs in the United States   [Sep-28-18 07:58AM  Reuters]
▶ Investing in Diabetes Stocks: A Beginner's Guide   [Sep-27-18 11:33AM  Motley Fool]
▶ Danish pharma giant Novo Nordisk to open first Mass. office   [Sep-18-18 02:06PM  American City Business Journals]
▶ 3 High-Quality Biotech Companies for 4th Quarter   [Sep-17-18 06:13PM  GuruFocus.com]
▶ [$$] Novo Nordisk buys UK university biotech spin-out Ziylo   [Aug-17-18 12:24AM  Financial Times]
▶ Novo Nordisk's Pricing Pressures Aren't Going Away   [Aug-14-18 04:22PM  Motley Fool]
▶ Eli Lilly Stock History   [08:08AM  Motley Fool]
▶ [$$] European Corporate Roundup for Wednesday   [05:40AM  The Wall Street Journal]
▶ Novo Nordisk: 2Q Earnings Snapshot   [05:33AM  Associated Press]
▶ Top Stocks Set to Disrupt the Diabetes Market   [Jul-06-18 12:59PM  Motley Fool]
▶ 5 Biggest Blockbuster Diabetes Drugs of the Future   [Jun-24-18 06:31AM  Motley Fool]
▶ Novo Nordisk Stock Rises 4% Over 2 Sessions   [Jun-21-18 05:33PM  TheStreet.com]
▶ Novo Nordisk shares fall after report of layoffs   [Jun-08-18 03:53AM  Reuters]
▶ Top Diabetes Stocks to Buy Today   [May-31-18 10:58AM  Motley Fool]
▶ Emisphere Development Update   [08:49AM  GlobeNewswire]
▶ How to Invest in Diabetes Stocks   [May-25-18 06:32PM  Motley Fool]
▶ Novo Nordisk Fights Payer Pressure With New Meds   [May-07-18 04:23PM  Motley Fool]
▶ Grifols, Novo expansions prompt $1.3M renovation of JoCo training center   [Apr-27-18 02:43PM  American City Business Journals]
▶ Emisphere Amends License Agreement with Novo Nordisk   [Apr-26-18 08:30AM  GlobeNewswire]

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