Intrinsic value of Sanofi ADR - SNY

Previous Close

$42.04

  Intrinsic Value

$249.10

stock screener

  Rating & Target

str. buy

+493%

Previous close

$42.04

 
Intrinsic value

$249.10

 
Up/down potential

+493%

 
Rating

str. buy

We calculate the intrinsic value of SNY 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 52.8

 

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, %
  18.20
  16.88
  15.69
  14.62
  13.66
  12.79
  12.02
  11.31
  10.68
  10.11
  9.60
  9.14
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
Revenue, $m
  49,742
  58,139
  67,262
  77,097
  87,629
  98,841
  110,717
  123,242
  136,407
  150,204
  164,627
  179,678
  195,360
  211,683
  228,659
  246,307
  264,647
  283,705
  303,511
  324,099
  345,505
  367,770
  390,939
  415,060
  440,183
  466,364
  493,659
  522,131
  551,845
  582,868
Variable operating expenses, $m
  40,071
  45,754
  51,928
  58,585
  65,714
  73,302
  81,340
  89,818
  98,728
  108,066
  111,424
  121,611
  132,225
  143,273
  154,763
  166,708
  179,121
  192,020
  205,425
  219,359
  233,848
  248,918
  264,599
  280,925
  297,929
  315,649
  334,123
  353,394
  373,505
  394,502
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
  40,071
  45,754
  51,928
  58,585
  65,714
  73,302
  81,340
  89,818
  98,728
  108,066
  111,424
  121,611
  132,225
  143,273
  154,763
  166,708
  179,121
  192,020
  205,425
  219,359
  233,848
  248,918
  264,599
  280,925
  297,929
  315,649
  334,123
  353,394
  373,505
  394,502
Operating income, $m
  9,671
  12,385
  15,333
  18,512
  21,915
  25,539
  29,377
  33,425
  37,679
  42,138
  53,203
  58,067
  63,135
  68,410
  73,896
  79,599
  85,526
  91,685
  98,086
  104,739
  111,657
  118,853
  126,340
  134,135
  142,254
  150,715
  159,536
  168,738
  178,340
  188,366
EBITDA, $m
  24,347
  28,457
  32,923
  37,737
  42,892
  48,380
  54,192
  60,324
  66,767
  73,520
  80,580
  87,947
  95,623
  103,613
  111,922
  120,560
  129,537
  138,865
  148,560
  158,637
  169,114
  180,013
  191,353
  203,160
  215,457
  228,271
  241,632
  255,568
  270,112
  285,297
Interest expense (income), $m
  423
  1,011
  1,613
  2,776
  4,039
  5,401
  6,859
  8,411
  10,056
  11,790
  13,613
  15,523
  17,520
  19,604
  21,775
  24,036
  26,386
  28,830
  31,369
  34,008
  36,750
  39,601
  42,565
  45,648
  48,856
  52,195
  55,674
  59,299
  63,078
  67,021
  71,135
Earnings before tax, $m
  8,660
  10,772
  12,558
  14,473
  16,515
  18,680
  20,965
  23,369
  25,889
  28,525
  37,680
  40,546
  43,531
  46,634
  49,860
  53,213
  56,696
  60,316
  64,078
  67,989
  72,056
  76,288
  80,692
  85,280
  90,059
  95,041
  100,237
  105,659
  111,319
  117,231
Tax expense, $m
  2,338
  2,908
  3,391
  3,908
  4,459
  5,044
  5,661
  6,310
  6,990
  7,702
  10,173
  10,948
  11,753
  12,591
  13,462
  14,367
  15,308
  16,285
  17,301
  18,357
  19,455
  20,598
  21,787
  23,025
  24,316
  25,661
  27,064
  28,528
  30,056
  31,652
Net income, $m
  6,322
  7,863
  9,167
  10,565
  12,056
  13,636
  15,305
  17,059
  18,899
  20,823
  27,506
  29,599
  31,777
  34,043
  36,398
  38,845
  41,388
  44,031
  46,777
  49,632
  52,601
  55,690
  58,906
  62,254
  65,743
  69,380
  73,173
  77,131
  81,263
  85,579

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
  141,715
  165,637
  191,629
  219,650
  249,656
  281,598
  315,432
  351,118
  388,625
  427,930
  469,023
  511,902
  556,581
  603,085
  651,451
  701,729
  753,979
  808,276
  864,704
  923,358
  984,344
  1,047,778
  1,113,787
  1,182,507
  1,254,083
  1,328,671
  1,406,436
  1,487,554
  1,572,208
  1,660,593
Adjusted assets (=assets-cash), $m
  141,715
  165,637
  191,629
  219,650
  249,656
  281,598
  315,432
  351,118
  388,625
  427,930
  469,023
  511,902
  556,581
  603,085
  651,451
  701,729
  753,979
  808,276
  864,704
  923,358
  984,344
  1,047,778
  1,113,787
  1,182,507
  1,254,083
  1,328,671
  1,406,436
  1,487,554
  1,572,208
  1,660,593
Revenue / Adjusted assets
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
  0.351
Average production assets, $m
  82,721
  96,684
  111,856
  128,213
  145,727
  164,372
  184,122
  204,952
  226,846
  249,789
  273,775
  298,804
  324,884
  352,029
  380,260
  409,608
  440,107
  471,801
  504,739
  538,976
  574,574
  611,602
  650,132
  690,245
  732,025
  775,563
  820,955
  868,304
  917,718
  969,310
Working capital, $m
  3,084
  3,605
  4,170
  4,780
  5,433
  6,128
  6,864
  7,641
  8,457
  9,313
  10,207
  11,140
  12,112
  13,124
  14,177
  15,271
  16,408
  17,590
  18,818
  20,094
  21,421
  22,802
  24,238
  25,734
  27,291
  28,915
  30,607
  32,372
  34,214
  36,138
Total debt, $m
  29,870
  51,400
  74,792
  100,012
  127,017
  155,764
  186,215
  218,333
  252,089
  287,464
  324,447
  363,039
  403,250
  445,103
  488,633
  533,882
  580,908
  629,775
  680,560
  733,349
  788,236
  845,327
  904,735
  966,583
  1,031,001
  1,098,131
  1,168,119
  1,241,125
  1,317,313
  1,396,860
Total liabilities, $m
  127,544
  149,073
  172,466
  197,685
  224,690
  253,438
  283,889
  316,006
  349,763
  385,137
  422,120
  460,712
  500,923
  542,777
  586,306
  631,556
  678,581
  727,448
  778,233
  831,022
  885,909
  943,000
  1,002,408
  1,064,256
  1,128,675
  1,195,804
  1,265,793
  1,338,798
  1,414,987
  1,494,534
Total equity, $m
  14,172
  16,564
  19,163
  21,965
  24,966
  28,160
  31,543
  35,112
  38,863
  42,793
  46,902
  51,190
  55,658
  60,309
  65,145
  70,173
  75,398
  80,828
  86,470
  92,336
  98,434
  104,778
  111,379
  118,251
  125,408
  132,867
  140,644
  148,755
  157,221
  166,059
Total liabilities and equity, $m
  141,716
  165,637
  191,629
  219,650
  249,656
  281,598
  315,432
  351,118
  388,626
  427,930
  469,022
  511,902
  556,581
  603,086
  651,451
  701,729
  753,979
  808,276
  864,703
  923,358
  984,343
  1,047,778
  1,113,787
  1,182,507
  1,254,083
  1,328,671
  1,406,437
  1,487,553
  1,572,208
  1,660,593
Debt-to-equity ratio
  2.110
  3.100
  3.900
  4.550
  5.090
  5.530
  5.900
  6.220
  6.490
  6.720
  6.920
  7.090
  7.250
  7.380
  7.500
  7.610
  7.700
  7.790
  7.870
  7.940
  8.010
  8.070
  8.120
  8.170
  8.220
  8.260
  8.310
  8.340
  8.380
  8.410
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6,322
  7,863
  9,167
  10,565
  12,056
  13,636
  15,305
  17,059
  18,899
  20,823
  27,506
  29,599
  31,777
  34,043
  36,398
  38,845
  41,388
  44,031
  46,777
  49,632
  52,601
  55,690
  58,906
  62,254
  65,743
  69,380
  73,173
  77,131
  81,263
  85,579
Depreciation, amort., depletion, $m
  14,676
  16,072
  17,589
  19,225
  20,977
  22,841
  24,816
  26,899
  29,088
  31,383
  27,377
  29,880
  32,488
  35,203
  38,026
  40,961
  44,011
  47,180
  50,474
  53,898
  57,457
  61,160
  65,013
  69,024
  73,202
  77,556
  82,096
  86,830
  91,772
  96,931
Funds from operations, $m
  20,998
  23,936
  26,756
  29,790
  33,032
  36,477
  40,121
  43,958
  47,987
  52,206
  54,884
  59,479
  64,266
  69,246
  74,424
  79,806
  85,399
  91,211
  97,251
  103,530
  110,058
  116,850
  123,919
  131,279
  138,945
  146,936
  155,269
  163,962
  173,035
  182,510
Change in working capital, $m
  475
  521
  566
  610
  653
  695
  736
  777
  816
  855
  894
  933
  972
  1,012
  1,053
  1,094
  1,137
  1,182
  1,228
  1,276
  1,327
  1,380
  1,436
  1,495
  1,558
  1,623
  1,692
  1,765
  1,842
  1,923
Cash from operations, $m
  20,523
  23,415
  26,191
  29,181
  32,379
  35,782
  39,384
  43,182
  47,171
  51,350
  53,989
  58,546
  63,293
  68,234
  73,372
  78,712
  84,262
  90,029
  96,023
  102,253
  108,731
  115,470
  122,482
  129,783
  137,388
  145,313
  153,576
  162,196
  171,193
  180,586
Maintenance CAPEX, $m
  -6,997
  -8,272
  -9,668
  -11,186
  -12,821
  -14,573
  -16,437
  -18,412
  -20,495
  -22,685
  -24,979
  -27,377
  -29,880
  -32,488
  -35,203
  -38,026
  -40,961
  -44,011
  -47,180
  -50,474
  -53,898
  -57,457
  -61,160
  -65,013
  -69,024
  -73,202
  -77,556
  -82,096
  -86,830
  -91,772
New CAPEX, $m
  -12,750
  -13,963
  -15,172
  -16,357
  -17,515
  -18,645
  -19,749
  -20,831
  -21,893
  -22,943
  -23,986
  -25,029
  -26,080
  -27,145
  -28,232
  -29,348
  -30,499
  -31,694
  -32,938
  -34,237
  -35,598
  -37,027
  -38,530
  -40,113
  -41,780
  -43,538
  -45,393
  -47,349
  -49,414
  -51,592
Cash from investing activities, $m
  -19,747
  -22,235
  -24,840
  -27,543
  -30,336
  -33,218
  -36,186
  -39,243
  -42,388
  -45,628
  -48,965
  -52,406
  -55,960
  -59,633
  -63,435
  -67,374
  -71,460
  -75,705
  -80,118
  -84,711
  -89,496
  -94,484
  -99,690
  -105,126
  -110,804
  -116,740
  -122,949
  -129,445
  -136,244
  -143,364
Free cash flow, $m
  776
  1,180
  1,351
  1,638
  2,044
  2,564
  3,198
  3,939
  4,783
  5,723
  5,024
  6,139
  7,333
  8,601
  9,937
  11,338
  12,802
  14,325
  15,905
  17,542
  19,235
  20,985
  22,792
  24,657
  26,583
  28,572
  30,627
  32,752
  34,949
  37,223
Issuance/(repayment) of debt, $m
  11,142
  21,529
  23,393
  25,219
  27,005
  28,748
  30,451
  32,118
  33,756
  35,375
  36,983
  38,592
  40,211
  41,853
  43,529
  45,250
  47,026
  48,867
  50,785
  52,789
  54,887
  57,091
  59,408
  61,848
  64,419
  67,129
  69,989
  73,006
  76,189
  79,547
Issuance/(repurchase) of shares, $m
  4,413
  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  
  15,555
  21,529
  23,393
  25,219
  27,005
  28,748
  30,451
  32,118
  33,756
  35,375
  36,983
  38,592
  40,211
  41,853
  43,529
  45,250
  47,026
  48,867
  50,785
  52,789
  54,887
  57,091
  59,408
  61,848
  64,419
  67,129
  69,989
  73,006
  76,189
  79,547
Total cash flow (excl. dividends), $m
  16,331
  22,709
  24,743
  26,858
  29,048
  31,312
  33,648
  36,057
  38,539
  41,098
  42,007
  44,731
  47,544
  50,454
  53,466
  56,588
  59,827
  63,192
  66,690
  70,331
  74,123
  78,076
  82,200
  86,505
  91,002
  95,702
  100,616
  105,757
  111,137
  116,769
Retained Cash Flow (-), $m
  -10,735
  -2,392
  -2,599
  -2,802
  -3,001
  -3,194
  -3,383
  -3,569
  -3,751
  -3,931
  -4,109
  -4,288
  -4,468
  -4,650
  -4,837
  -5,028
  -5,225
  -5,430
  -5,643
  -5,865
  -6,099
  -6,343
  -6,601
  -6,872
  -7,158
  -7,459
  -7,777
  -8,112
  -8,465
  -8,839
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
  337
  398
  465
  538
  617
  701
  791
  886
  986
  1,091
  1,202
  1,317
  1,437
  1,563
  1,693
  1,829
  1,970
  2,117
  2,270
  2,428
  2,593
  2,764
  2,942
  3,128
  3,320
  3,521
  3,731
  3,949
  4,177
  4,415
Cash available for distribution, $m
  5,596
  20,317
  22,144
  24,056
  26,048
  28,118
  30,265
  32,488
  34,788
  37,167
  37,898
  40,443
  43,077
  45,804
  48,630
  51,560
  54,602
  57,762
  61,047
  64,465
  68,024
  71,732
  75,599
  79,633
  83,844
  88,243
  92,840
  97,645
  102,672
  107,931
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
  5,365
  18,599
  19,271
  19,807
  20,190
  20,406
  20,447
  20,306
  19,984
  19,485
  17,997
  17,258
  16,378
  15,377
  14,277
  13,103
  11,881
  10,637
  9,400
  8,192
  7,036
  5,952
  4,955
  4,056
  3,262
  2,574
  1,993
  1,511
  1,121
  813
Current shareholders' claim on cash, %
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6
  88.6

Sanofi is a healthcare company, focused on patient needs and engaged in the research, development, manufacture and marketing of therapeutic solutions. The Company's segments are Pharmaceuticals, Human Vaccines (Vaccines), and Other. The Pharmaceuticals segment comprises the commercial operations of various franchises, including Speciality Care (Rare Diseases, Multiple Sclerosis, and Oncology), Diabetes and Cardiovascular, Established Prescription Products, Consumer Healthcare and Generics, and research and development, production and marketing activities for all of the Company's pharmaceuticals operations. The Vaccines segment is dedicated to vaccines and includes the commercial operations of the Company's vaccines division Sanofi Pasteur and dedicated research and development, production and marketing activities for the Company's vaccines operations. Its Rare Diseases products include Cerezyme, Cerdelga, Myozyme and Lumizyme, Fabrazyme, and Aldurazyme.

FINANCIAL RATIOS  of  Sanofi ADR (SNY)

Valuation Ratios
P/E Ratio 10.8
Price to Sales 1.5
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 6.5
Price to Free Cash Flow 8.8
Growth Rates
Sales Growth Rate -0.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.9%
Cap. Spend. - 3 Yr. Gr. Rate 9.8%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 29.2%
Total Debt to Equity 32.3%
Interest Coverage 15
Management Effectiveness
Return On Assets 4.8%
Ret/ On Assets - 3 Yr. Avg. 5.4%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 6.1%
Return On Equity 8.1%
Return On Equity - 3 Yr. Avg. 7.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 69.2%
Gross Margin - 3 Yr. Avg. 68.6%
EBITDA Margin 27%
EBITDA Margin - 3 Yr. Avg. 30.3%
Operating Margin 17.4%
Oper. Margin - 3 Yr. Avg. 17.4%
Pre-Tax Margin 16.4%
Pre-Tax Margin - 3 Yr. Avg. 16.4%
Net Profit Margin 13.6%
Net Profit Margin - 3 Yr. Avg. 13.2%
Effective Tax Rate 23.4%
Eff/ Tax Rate - 3 Yr. Avg. 19.5%
Payout Ratio 79.8%

SNY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SNY stock intrinsic value calculation we used $42083 million for the last fiscal year's total revenue generated by Sanofi ADR. The default revenue input number comes from 2017 income statement of Sanofi 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 SNY stock valuation model: a) initial revenue growth rate of 18.2% 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 SNY is calculated based on our internal credit rating of Sanofi 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 Sanofi 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 SNY stock the variable cost ratio is equal to 82.9%.

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 SNY 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 Sanofi ADR.

Corporate tax rate of 27% is the nominal tax rate for Sanofi 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 SNY stock is equal to 0.8%.

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 SNY are equal to 166.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Sanofi 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 SNY is equal to 6.2%. 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 - $3437 million for Sanofi 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 1257 million for Sanofi 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 Sanofi ADR at the current share price and the inputted number of shares is $52.8 billion.

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COMPANY NEWS

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▶ Can Regeneron Stock Hit $400 For The First Time This Year?   [Aug-02-18 04:13PM  Investor's Business Daily]
▶ [$$] Sanofi Narrows EPS Growth Range as Sales Fall   [06:40AM  The Wall Street Journal]
▶ Sanofi: 2Q Earnings Snapshot   [05:05AM  Associated Press]
▶ [$$] Sanofi: raring to go   [01:15AM  Financial Times]
▶ Sanofi Ships First Flu Vaccines for 2018-2019 Season   [Jul-30-18 01:37PM  PR Newswire]
▶ Pharma Favorites: 7 Healthy Picks in the Drug Sector   [Jul-27-18 02:45AM  Investopedia]
▶ Sanofi's venture arm backs 'digital' drug startup Click Therapeutics   [Jul-23-18 02:19PM  American City Business Journals]
▶ Roche, Sanofi not raising US drug prices   [Jul-20-18 06:42AM  CNBC Videos]
▶ BofA Revives Myokardia With New Buy Rating   [Jul-10-18 02:06PM  Benzinga]
▶ Top Stocks Set to Disrupt the Diabetes Market   [Jul-06-18 12:59PM  Motley Fool]
▶ Upside 'Substantial' As Regeneron Ups Price On Blockbuster Hopeful   [Jul-02-18 04:38PM  Investor's Business Daily]
▶ [$$] Sanofi to Sell Generics Arm   [Jun-28-18 03:40AM  The Wall Street Journal]
▶ 5 Global Bargains That Can Outperform   [Jun-25-18 02:52PM  Investopedia]
▶ Mylan Stock Looks Cheap, but Dont Overlook These Risks   [Jun-21-18 12:12PM  InvestorPlace]
▶ What Makes Sanofi (EPA:SAN) An Attractive Investment?   [Jun-19-18 12:25PM  Simply Wall St.]
▶ Sanofi, Merck and J&J Tout Lower Drug Prices   [Jun-05-18 05:26PM  TheStreet.com]
▶ [$$] Sanofi Says Average Net Price of Its Drugs Fell Last Year   [Jun-01-18 08:14PM  The Wall Street Journal]
▶ Top Diabetes Stocks to Buy Today   [May-31-18 10:58AM  Motley Fool]
▶ Sanofi trolls Roseanne over Ambien excuse: 'Racism not a side effect'   [11:47AM  American City Business Journals]
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