Intrinsic value of Telecom Italia ADR - TI

Previous Close

$6.20

  Intrinsic Value

$2.03

stock screener

  Rating & Target

str. sell

-67%

Previous close

$6.20

 
Intrinsic value

$2.03

 
Up/down potential

-67%

 
Rating

str. sell

We calculate the intrinsic value of TI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 83.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  20,761
  21,239
  21,784
  22,397
  23,076
  23,821
  24,633
  25,511
  26,457
  27,472
  28,558
  29,717
  30,952
  32,263
  33,655
  35,130
  36,691
  38,342
  40,086
  41,928
  43,872
  45,921
  48,082
  50,358
  52,755
  55,279
  57,936
  60,732
  63,673
  66,767
Variable operating expenses, $m
  17,611
  17,928
  18,290
  18,696
  19,146
  19,640
  20,178
  20,760
  21,387
  22,060
  18,932
  19,700
  20,518
  21,388
  22,310
  23,288
  24,323
  25,417
  26,574
  27,795
  29,083
  30,442
  31,874
  33,383
  34,972
  36,645
  38,407
  40,260
  42,210
  44,261
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
  17,611
  17,928
  18,290
  18,696
  19,146
  19,640
  20,178
  20,760
  21,387
  22,060
  18,932
  19,700
  20,518
  21,388
  22,310
  23,288
  24,323
  25,417
  26,574
  27,795
  29,083
  30,442
  31,874
  33,383
  34,972
  36,645
  38,407
  40,260
  42,210
  44,261
Operating income, $m
  3,150
  3,311
  3,495
  3,701
  3,930
  4,181
  4,455
  4,751
  5,070
  5,412
  9,627
  10,017
  10,433
  10,875
  11,345
  11,842
  12,368
  12,925
  13,513
  14,133
  14,789
  15,479
  16,208
  16,975
  17,783
  18,634
  19,530
  20,472
  21,463
  22,506
EBITDA, $m
  12,396
  12,681
  13,007
  13,373
  13,779
  14,223
  14,708
  15,232
  15,797
  16,403
  17,052
  17,744
  18,481
  19,264
  20,095
  20,976
  21,908
  22,893
  23,935
  25,035
  26,195
  27,419
  28,709
  30,068
  31,500
  33,007
  34,593
  36,262
  38,018
  39,866
Interest expense (income), $m
  2,434
  3,453
  3,560
  3,676
  3,808
  3,957
  4,121
  4,302
  4,498
  4,711
  4,940
  5,187
  5,450
  5,731
  6,030
  6,348
  6,685
  7,042
  7,421
  7,821
  8,244
  8,690
  9,161
  9,658
  10,181
  10,733
  11,314
  11,926
  12,570
  13,247
  13,960
Earnings before tax, $m
  -303
  -250
  -181
  -107
  -27
  60
  153
  252
  358
  471
  4,440
  4,568
  4,703
  4,846
  4,997
  5,157
  5,326
  5,504
  5,692
  5,890
  6,099
  6,318
  6,550
  6,794
  7,050
  7,320
  7,604
  7,902
  8,216
  8,546
Tax expense, $m
  0
  0
  0
  0
  0
  16
  41
  68
  97
  127
  1,199
  1,233
  1,270
  1,308
  1,349
  1,392
  1,438
  1,486
  1,537
  1,590
  1,647
  1,706
  1,768
  1,834
  1,904
  1,976
  2,053
  2,134
  2,218
  2,307
Net income, $m
  -303
  -250
  -181
  -107
  -27
  44
  112
  184
  262
  344
  3,241
  3,334
  3,433
  3,537
  3,648
  3,764
  3,888
  4,018
  4,155
  4,300
  4,452
  4,612
  4,781
  4,959
  5,147
  5,344
  5,551
  5,769
  5,998
  6,239

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
  75,770
  77,513
  79,505
  81,742
  84,220
  86,939
  89,900
  93,105
  96,558
  100,263
  104,228
  108,458
  112,962
  117,748
  122,828
  128,210
  133,908
  139,934
  146,300
  153,022
  160,115
  167,596
  175,480
  183,788
  192,537
  201,749
  211,446
  221,649
  232,384
  243,675
Adjusted assets (=assets-cash), $m
  75,770
  77,513
  79,505
  81,742
  84,220
  86,939
  89,900
  93,105
  96,558
  100,263
  104,228
  108,458
  112,962
  117,748
  122,828
  128,210
  133,908
  139,934
  146,300
  153,022
  160,115
  167,596
  175,480
  183,788
  192,537
  201,749
  211,446
  221,649
  232,384
  243,675
Revenue / Adjusted assets
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
Average production assets, $m
  53,979
  55,220
  56,639
  58,233
  59,998
  61,935
  64,045
  66,328
  68,788
  71,428
  74,252
  77,265
  80,474
  83,884
  87,502
  91,337
  95,396
  99,689
  104,224
  109,013
  114,066
  119,395
  125,012
  130,930
  137,164
  143,726
  150,634
  157,903
  165,550
  173,594
Working capital, $m
  -7,910
  -8,092
  -8,300
  -8,533
  -8,792
  -9,076
  -9,385
  -9,720
  -10,080
  -10,467
  -10,881
  -11,322
  -11,793
  -12,292
  -12,822
  -13,384
  -13,979
  -14,608
  -15,273
  -15,975
  -16,715
  -17,496
  -18,319
  -19,186
  -20,100
  -21,061
  -22,074
  -23,139
  -24,259
  -25,438
Total debt, $m
  37,475
  38,693
  40,086
  41,649
  43,381
  45,282
  47,351
  49,592
  52,005
  54,595
  57,367
  60,323
  63,472
  66,818
  70,368
  74,131
  78,113
  82,325
  86,775
  91,474
  96,432
  101,661
  107,172
  112,979
  119,095
  125,534
  132,312
  139,444
  146,948
  154,840
Total liabilities, $m
  52,963
  54,182
  55,574
  57,137
  58,870
  60,770
  62,840
  65,080
  67,494
  70,084
  72,855
  75,812
  78,960
  82,306
  85,857
  89,619
  93,602
  97,814
  102,264
  106,963
  111,921
  117,149
  122,661
  128,468
  134,584
  141,023
  147,801
  154,933
  162,436
  170,329
Total equity, $m
  22,807
  23,331
  23,931
  24,604
  25,350
  26,169
  27,060
  28,025
  29,064
  30,179
  31,373
  32,646
  34,001
  35,442
  36,971
  38,591
  40,306
  42,120
  44,036
  46,060
  48,195
  50,446
  52,820
  55,320
  57,954
  60,727
  63,645
  66,716
  69,947
  73,346
Total liabilities and equity, $m
  75,770
  77,513
  79,505
  81,741
  84,220
  86,939
  89,900
  93,105
  96,558
  100,263
  104,228
  108,458
  112,961
  117,748
  122,828
  128,210
  133,908
  139,934
  146,300
  153,023
  160,116
  167,595
  175,481
  183,788
  192,538
  201,750
  211,446
  221,649
  232,383
  243,675
Debt-to-equity ratio
  1.640
  1.660
  1.680
  1.690
  1.710
  1.730
  1.750
  1.770
  1.790
  1.810
  1.830
  1.850
  1.870
  1.890
  1.900
  1.920
  1.940
  1.950
  1.970
  1.990
  2.000
  2.020
  2.030
  2.040
  2.060
  2.070
  2.080
  2.090
  2.100
  2.110
Adjusted equity ratio
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -303
  -250
  -181
  -107
  -27
  44
  112
  184
  262
  344
  3,241
  3,334
  3,433
  3,537
  3,648
  3,764
  3,888
  4,018
  4,155
  4,300
  4,452
  4,612
  4,781
  4,959
  5,147
  5,344
  5,551
  5,769
  5,998
  6,239
Depreciation, amort., depletion, $m
  9,247
  9,371
  9,513
  9,672
  9,849
  10,042
  10,253
  10,481
  10,727
  10,991
  7,425
  7,727
  8,047
  8,388
  8,750
  9,134
  9,540
  9,969
  10,422
  10,901
  11,407
  11,940
  12,501
  13,093
  13,716
  14,373
  15,063
  15,790
  16,555
  17,359
Funds from operations, $m
  8,944
  9,121
  9,331
  9,565
  9,822
  10,086
  10,365
  10,666
  10,989
  11,336
  10,666
  11,061
  11,480
  11,926
  12,398
  12,898
  13,427
  13,987
  14,577
  15,201
  15,859
  16,552
  17,283
  18,052
  18,863
  19,716
  20,614
  21,559
  22,553
  23,598
Change in working capital, $m
  -155
  -182
  -208
  -233
  -259
  -284
  -309
  -335
  -360
  -387
  -414
  -442
  -470
  -500
  -530
  -562
  -595
  -629
  -665
  -702
  -740
  -781
  -823
  -867
  -913
  -962
  -1,012
  -1,065
  -1,121
  -1,179
Cash from operations, $m
  9,099
  9,303
  9,539
  9,798
  10,081
  10,370
  10,674
  11,000
  11,350
  11,722
  11,080
  11,502
  11,951
  12,425
  12,928
  13,460
  14,022
  14,616
  15,242
  15,903
  16,599
  17,333
  18,106
  18,920
  19,776
  20,678
  21,626
  22,624
  23,673
  24,777
Maintenance CAPEX, $m
  -5,293
  -5,398
  -5,522
  -5,664
  -5,823
  -6,000
  -6,194
  -6,404
  -6,633
  -6,879
  -7,143
  -7,425
  -7,727
  -8,047
  -8,388
  -8,750
  -9,134
  -9,540
  -9,969
  -10,422
  -10,901
  -11,407
  -11,940
  -12,501
  -13,093
  -13,716
  -14,373
  -15,063
  -15,790
  -16,555
New CAPEX, $m
  -1,053
  -1,242
  -1,419
  -1,593
  -1,765
  -1,937
  -2,109
  -2,283
  -2,460
  -2,640
  -2,824
  -3,014
  -3,209
  -3,410
  -3,618
  -3,835
  -4,059
  -4,293
  -4,536
  -4,789
  -5,053
  -5,329
  -5,617
  -5,918
  -6,233
  -6,563
  -6,908
  -7,269
  -7,647
  -8,044
Cash from investing activities, $m
  -6,346
  -6,640
  -6,941
  -7,257
  -7,588
  -7,937
  -8,303
  -8,687
  -9,093
  -9,519
  -9,967
  -10,439
  -10,936
  -11,457
  -12,006
  -12,585
  -13,193
  -13,833
  -14,505
  -15,211
  -15,954
  -16,736
  -17,557
  -18,419
  -19,326
  -20,279
  -21,281
  -22,332
  -23,437
  -24,599
Free cash flow, $m
  2,754
  2,664
  2,598
  2,541
  2,492
  2,433
  2,371
  2,313
  2,257
  2,204
  1,113
  1,064
  1,015
  968
  921
  875
  829
  784
  738
  691
  645
  597
  549
  500
  450
  399
  346
  292
  236
  178
Issuance/(repayment) of debt, $m
  1,133
  1,218
  1,392
  1,563
  1,732
  1,901
  2,070
  2,240
  2,414
  2,590
  2,771
  2,957
  3,148
  3,346
  3,550
  3,763
  3,983
  4,212
  4,450
  4,699
  4,958
  5,229
  5,511
  5,807
  6,116
  6,439
  6,778
  7,132
  7,503
  7,892
Issuance/(repurchase) of shares, $m
  787
  774
  781
  780
  773
  775
  780
  781
  778
  771
  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  
  1,920
  1,992
  2,173
  2,343
  2,505
  2,676
  2,850
  3,021
  3,192
  3,361
  2,771
  2,957
  3,148
  3,346
  3,550
  3,763
  3,983
  4,212
  4,450
  4,699
  4,958
  5,229
  5,511
  5,807
  6,116
  6,439
  6,778
  7,132
  7,503
  7,892
Total cash flow (excl. dividends), $m
  4,673
  4,656
  4,772
  4,885
  4,997
  5,108
  5,220
  5,333
  5,448
  5,565
  3,884
  4,021
  4,164
  4,314
  4,472
  4,638
  4,812
  4,995
  5,188
  5,390
  5,603
  5,826
  6,061
  6,307
  6,566
  6,838
  7,124
  7,424
  7,739
  8,071
Retained Cash Flow (-), $m
  -787
  -774
  -781
  -780
  -773
  -818
  -891
  -965
  -1,039
  -1,115
  -1,193
  -1,273
  -1,356
  -1,441
  -1,529
  -1,620
  -1,715
  -1,814
  -1,916
  -2,023
  -2,135
  -2,252
  -2,373
  -2,501
  -2,634
  -2,773
  -2,919
  -3,071
  -3,231
  -3,399
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
  3,886
  3,882
  3,991
  4,105
  4,224
  4,290
  4,329
  4,369
  4,409
  4,450
  2,691
  2,747
  2,808
  2,873
  2,943
  3,018
  3,097
  3,182
  3,271
  3,367
  3,468
  3,574
  3,687
  3,807
  3,932
  4,065
  4,205
  4,353
  4,508
  4,672
Discount rate, %
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.42
  17.24
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
  28.09
  29.49
  30.97
  32.52
PV of cash for distribution, $m
  3,602
  3,310
  3,106
  2,892
  2,671
  2,411
  2,140
  1,880
  1,632
  1,400
  711
  600
  500
  411
  333
  265
  207
  159
  120
  88
  64
  45
  31
  21
  14
  9
  5
  3
  2
  1
Current shareholders' claim on cash, %
  99.1
  98.2
  97.3
  96.5
  95.7
  94.9
  94.1
  93.4
  92.7
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1
  92.1

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company's Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

FINANCIAL RATIOS  of  Telecom Italia ADR (TI)

Valuation Ratios
P/E Ratio 68.5
Price to Sales 6.5
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 21.9
Price to Free Cash Flow 223.7
Growth Rates
Sales Growth Rate -3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24%
Cap. Spend. - 3 Yr. Gr. Rate 3%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 134.8%
Total Debt to Equity 153.5%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.8%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 2%
Return On Equity 9.3%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 85.9%
Gross Margin - 3 Yr. Avg. 83%
EBITDA Margin 49.4%
EBITDA Margin - 3 Yr. Avg. 50.9%
Operating Margin 19.6%
Oper. Margin - 3 Yr. Avg. 18.5%
Pre-Tax Margin 14.7%
Pre-Tax Margin - 3 Yr. Avg. 9.3%
Net Profit Margin 9.5%
Net Profit Margin - 3 Yr. Avg. 5.1%
Effective Tax Rate 31.4%
Eff/ Tax Rate - 3 Yr. Avg. 53.5%
Payout Ratio 12.6%

TI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TI stock intrinsic value calculation we used $20354 million for the last fiscal year's total revenue generated by Telecom Italia ADR. The default revenue input number comes from 2016 income statement of Telecom Italia 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 TI 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 7.9%, whose default value for TI is calculated based on our internal credit rating of Telecom Italia 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 Telecom Italia 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 TI stock the variable cost ratio is equal to 85.2%.

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 TI 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 9.5% for Telecom Italia ADR.

Corporate tax rate of 27% is the nominal tax rate for Telecom Italia 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 TI 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 TI are equal to 260%.

Life of production assets of 10 years is the average useful life of capital assets used in Telecom Italia 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 TI is equal to -38.1%. 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 - $22323 million for Telecom Italia 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 13500 million for Telecom Italia 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 Telecom Italia ADR at the current share price and the inputted number of shares is $83.7 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Telecom Italia SpA (BIT:TIT) Is Trading At A 32.52% Discount   [Jun-22-18 06:50AM  Simply Wall St.]
▶ Telecom Italia CEO Under Fire After Bashing Directors   [Jun-21-18 09:14AM  Bloomberg]
▶ [$$] Telecom Italia Tug-of-War Explained   [Jun-08-18 11:31AM  The Wall Street Journal]
▶ [$$] Elliott Management's Activism in Europe Explained   [May-24-18 12:56PM  The Wall Street Journal]
▶ [$$] Telecom Italia Profit Rises Despite Fine   [02:31AM  The Wall Street Journal]
▶ Telecom Italia, Mediaset sign TV content deal   [May-10-18 07:25AM  Reuters]
▶ [$$] Elliott victory cannot hide Telecom Italias weakness   [May-09-18 11:01PM  Financial Times]
▶ [$$] Telecom Italia Reappoints CEO, Names New Chairman   [01:22AM  The Wall Street Journal]
▶ Elliott Beats Vivendi in Clash for Telecom Italias Board   [May-04-18 12:20PM  Bloomberg Video]
▶ [$$] Elliott Scores a Victory in Telecom Italia Fight   [12:02PM  The Wall Street Journal]
▶ The battle for Telecom Italia   [May-02-18 09:42AM  CNBC Videos]
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