Intrinsic value of Thermo Fisher Scientific - TMO

Previous Close

$215.32

  Intrinsic Value

$70.89

stock screener

  Rating & Target

str. sell

-67%

Previous close

$215.32

 
Intrinsic value

$70.89

 
Up/down potential

-67%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TMO 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   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, %
  7.72
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
  5.16
  5.14
  5.13
Revenue, $m
  18,274
  19,681
  21,143
  22,663
  24,242
  25,884
  27,591
  29,366
  31,214
  33,137
  35,141
  37,228
  39,405
  41,676
  44,046
  46,520
  49,105
  51,806
  54,629
  57,582
  60,671
  63,904
  67,288
  70,831
  74,542
  78,430
  82,503
  86,773
  91,247
  95,939
  100,858
Variable operating expenses, $m
 
  16,801
  17,891
  19,023
  20,200
  21,424
  22,696
  24,019
  25,396
  26,829
  28,323
  27,746
  29,368
  31,061
  32,827
  34,671
  36,597
  38,610
  40,714
  42,915
  45,217
  47,627
  50,149
  52,790
  55,555
  58,453
  61,489
  64,671
  68,006
  71,502
  75,168
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
  15,825
  16,801
  17,891
  19,023
  20,200
  21,424
  22,696
  24,019
  25,396
  26,829
  28,323
  27,746
  29,368
  31,061
  32,827
  34,671
  36,597
  38,610
  40,714
  42,915
  45,217
  47,627
  50,149
  52,790
  55,555
  58,453
  61,489
  64,671
  68,006
  71,502
  75,168
Operating income, $m
  2,449
  2,880
  3,253
  3,640
  4,042
  4,460
  4,895
  5,347
  5,818
  6,308
  6,818
  9,483
  10,037
  10,615
  11,219
  11,849
  12,508
  13,196
  13,915
  14,667
  15,454
  16,277
  17,139
  18,042
  18,987
  19,977
  21,015
  22,102
  23,242
  24,437
  25,690
EBITDA, $m
  4,207
  5,847
  6,282
  6,733
  7,202
  7,690
  8,197
  8,725
  9,274
  9,845
  10,440
  11,061
  11,707
  12,382
  13,086
  13,821
  14,589
  15,392
  16,230
  17,108
  18,026
  18,986
  19,991
  21,044
  22,147
  23,302
  24,512
  25,780
  27,110
  28,504
  29,965
Interest expense (income), $m
  458
  554
  617
  683
  751
  823
  897
  974
  1,054
  1,137
  1,224
  1,314
  1,408
  1,507
  1,609
  1,716
  1,828
  1,944
  2,066
  2,193
  2,327
  2,466
  2,612
  2,764
  2,924
  3,092
  3,267
  3,451
  3,643
  3,845
  4,057
Earnings before tax, $m
  2,024
  2,326
  2,636
  2,957
  3,291
  3,637
  3,998
  4,373
  4,764
  5,170
  5,594
  8,168
  8,629
  9,109
  9,610
  10,133
  10,680
  11,251
  11,849
  12,473
  13,127
  13,811
  14,527
  15,277
  16,062
  16,885
  17,748
  18,651
  19,598
  20,591
  21,633
Tax expense, $m
  -1
  628
  712
  798
  888
  982
  1,080
  1,181
  1,286
  1,396
  1,510
  2,205
  2,330
  2,459
  2,595
  2,736
  2,884
  3,038
  3,199
  3,368
  3,544
  3,729
  3,922
  4,125
  4,337
  4,559
  4,792
  5,036
  5,292
  5,560
  5,841
Net income, $m
  2,022
  1,698
  1,924
  2,159
  2,402
  2,655
  2,919
  3,193
  3,478
  3,774
  4,084
  5,963
  6,299
  6,649
  7,015
  7,397
  7,796
  8,213
  8,650
  9,106
  9,583
  10,082
  10,605
  11,152
  11,726
  12,326
  12,956
  13,615
  14,307
  15,032
  15,792

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  802
  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
  45,908
  48,595
  52,206
  55,958
  59,857
  63,911
  68,125
  72,509
  77,071
  81,820
  86,767
  91,922
  97,297
  102,904
  108,755
  114,865
  121,246
  127,915
  134,887
  142,178
  149,805
  157,787
  166,143
  174,892
  184,055
  193,654
  203,712
  214,253
  225,302
  236,886
  249,031
Adjusted assets (=assets-cash), $m
  45,106
  48,595
  52,206
  55,958
  59,857
  63,911
  68,125
  72,509
  77,071
  81,820
  86,767
  91,922
  97,297
  102,904
  108,755
  114,865
  121,246
  127,915
  134,887
  142,178
  149,805
  157,787
  166,143
  174,892
  184,055
  193,654
  203,712
  214,253
  225,302
  236,886
  249,031
Revenue / Adjusted assets
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
  0.405
Average production assets, $m
  15,877
  17,103
  18,374
  19,694
  21,066
  22,493
  23,976
  25,519
  27,125
  28,796
  30,537
  32,351
  34,243
  36,216
  38,276
  40,426
  42,672
  45,019
  47,473
  50,039
  52,723
  55,533
  58,473
  61,552
  64,777
  68,156
  71,695
  75,405
  79,294
  83,371
  87,645
Working capital, $m
  2,155
  2,814
  3,024
  3,241
  3,467
  3,701
  3,945
  4,199
  4,464
  4,739
  5,025
  5,324
  5,635
  5,960
  6,299
  6,652
  7,022
  7,408
  7,812
  8,234
  8,676
  9,138
  9,622
  10,129
  10,660
  11,215
  11,798
  12,408
  13,048
  13,719
  14,423
Total debt, $m
  16,628
  17,626
  19,510
  21,469
  23,505
  25,620
  27,820
  30,109
  32,490
  34,969
  37,551
  40,242
  43,048
  45,975
  49,029
  52,218
  55,550
  59,031
  62,670
  66,476
  70,457
  74,624
  78,986
  83,553
  88,336
  93,346
  98,597
  104,099
  109,867
  115,913
  122,253
Total liabilities, $m
  24,368
  25,367
  27,251
  29,210
  31,246
  33,361
  35,561
  37,850
  40,231
  42,710
  45,292
  47,983
  50,789
  53,716
  56,770
  59,959
  63,291
  66,772
  70,411
  74,217
  78,198
  82,365
  86,727
  91,294
  96,077
  101,087
  106,338
  111,840
  117,608
  123,654
  129,994
Total equity, $m
  21,539
  23,229
  24,954
  26,748
  28,612
  30,549
  32,564
  34,659
  36,840
  39,110
  41,474
  43,939
  46,508
  49,188
  51,985
  54,905
  57,956
  61,143
  64,476
  67,961
  71,607
  75,422
  79,416
  83,598
  87,978
  92,567
  97,374
  102,413
  107,694
  113,231
  119,037
Total liabilities and equity, $m
  45,907
  48,596
  52,205
  55,958
  59,858
  63,910
  68,125
  72,509
  77,071
  81,820
  86,766
  91,922
  97,297
  102,904
  108,755
  114,864
  121,247
  127,915
  134,887
  142,178
  149,805
  157,787
  166,143
  174,892
  184,055
  193,654
  203,712
  214,253
  225,302
  236,885
  249,031
Debt-to-equity ratio
  0.772
  0.760
  0.780
  0.800
  0.820
  0.840
  0.850
  0.870
  0.880
  0.890
  0.910
  0.920
  0.930
  0.930
  0.940
  0.950
  0.960
  0.970
  0.970
  0.980
  0.980
  0.990
  0.990
  1.000
  1.000
  1.010
  1.010
  1.020
  1.020
  1.020
  1.030
Adjusted equity ratio
  0.460
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,022
  1,698
  1,924
  2,159
  2,402
  2,655
  2,919
  3,193
  3,478
  3,774
  4,084
  5,963
  6,299
  6,649
  7,015
  7,397
  7,796
  8,213
  8,650
  9,106
  9,583
  10,082
  10,605
  11,152
  11,726
  12,326
  12,956
  13,615
  14,307
  15,032
  15,792
Depreciation, amort., depletion, $m
  1,758
  2,967
  3,029
  3,093
  3,160
  3,230
  3,302
  3,378
  3,456
  3,537
  3,622
  1,578
  1,670
  1,767
  1,867
  1,972
  2,082
  2,196
  2,316
  2,441
  2,572
  2,709
  2,852
  3,003
  3,160
  3,325
  3,497
  3,678
  3,868
  4,067
  4,275
Funds from operations, $m
  2,929
  4,665
  4,953
  5,252
  5,563
  5,885
  6,221
  6,570
  6,934
  7,312
  7,706
  7,541
  7,969
  8,416
  8,882
  9,369
  9,878
  10,410
  10,965
  11,547
  12,155
  12,791
  13,457
  14,155
  14,885
  15,651
  16,453
  17,294
  18,175
  19,099
  20,067
Change in working capital, $m
  -227
  201
  209
  217
  226
  235
  244
  254
  264
  275
  286
  299
  311
  325
  339
  354
  370
  386
  404
  422
  442
  462
  484
  507
  531
  556
  583
  610
  640
  671
  703
Cash from operations, $m
  3,156
  4,464
  4,744
  5,035
  5,337
  5,651
  5,977
  6,316
  6,669
  7,037
  7,420
  7,242
  7,658
  8,091
  8,543
  9,015
  9,508
  10,023
  10,561
  11,124
  11,713
  12,329
  12,973
  13,648
  14,355
  15,095
  15,871
  16,683
  17,535
  18,428
  19,364
Maintenance CAPEX, $m
  0
  -774
  -834
  -896
  -961
  -1,028
  -1,097
  -1,170
  -1,245
  -1,323
  -1,405
  -1,490
  -1,578
  -1,670
  -1,767
  -1,867
  -1,972
  -2,082
  -2,196
  -2,316
  -2,441
  -2,572
  -2,709
  -2,852
  -3,003
  -3,160
  -3,325
  -3,497
  -3,678
  -3,868
  -4,067
New CAPEX, $m
  -444
  -1,226
  -1,271
  -1,321
  -1,372
  -1,427
  -1,483
  -1,543
  -1,606
  -1,671
  -1,741
  -1,814
  -1,892
  -1,973
  -2,059
  -2,150
  -2,246
  -2,347
  -2,454
  -2,566
  -2,684
  -2,809
  -2,941
  -3,079
  -3,225
  -3,378
  -3,540
  -3,710
  -3,889
  -4,077
  -4,275
Cash from investing activities, $m
  -5,532
  -2,000
  -2,105
  -2,217
  -2,333
  -2,455
  -2,580
  -2,713
  -2,851
  -2,994
  -3,146
  -3,304
  -3,470
  -3,643
  -3,826
  -4,017
  -4,218
  -4,429
  -4,650
  -4,882
  -5,125
  -5,381
  -5,650
  -5,931
  -6,228
  -6,538
  -6,865
  -7,207
  -7,567
  -7,945
  -8,342
Free cash flow, $m
  -2,376
  2,464
  2,639
  2,818
  3,004
  3,196
  3,396
  3,604
  3,819
  4,042
  4,274
  3,938
  4,188
  4,448
  4,717
  4,998
  5,290
  5,595
  5,912
  6,242
  6,587
  6,948
  7,324
  7,717
  8,127
  8,557
  9,006
  9,476
  9,968
  10,483
  11,022
Issuance/(repayment) of debt, $m
  4,174
  1,800
  1,885
  1,959
  2,035
  2,116
  2,200
  2,288
  2,381
  2,479
  2,582
  2,691
  2,806
  2,927
  3,054
  3,189
  3,331
  3,481
  3,639
  3,806
  3,982
  4,167
  4,362
  4,567
  4,783
  5,011
  5,250
  5,502
  5,768
  6,047
  6,340
Issuance/(repurchase) of shares, $m
  -1,115
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  3,099
  1,800
  1,885
  1,959
  2,035
  2,116
  2,200
  2,288
  2,381
  2,479
  2,582
  2,691
  2,806
  2,927
  3,054
  3,189
  3,331
  3,481
  3,639
  3,806
  3,982
  4,167
  4,362
  4,567
  4,783
  5,011
  5,250
  5,502
  5,768
  6,047
  6,340
Total cash flow (excl. dividends), $m
  572
  4,263
  4,524
  4,776
  5,039
  5,312
  5,596
  5,892
  6,200
  6,521
  6,856
  6,629
  6,994
  7,374
  7,772
  8,187
  8,622
  9,076
  9,551
  10,048
  10,569
  11,114
  11,685
  12,284
  12,910
  13,568
  14,256
  14,978
  15,736
  16,530
  17,362
Retained Cash Flow (-), $m
  -189
  -1,690
  -1,726
  -1,793
  -1,864
  -1,937
  -2,015
  -2,095
  -2,181
  -2,270
  -2,365
  -2,464
  -2,569
  -2,680
  -2,797
  -2,920
  -3,050
  -3,188
  -3,332
  -3,485
  -3,646
  -3,815
  -3,994
  -4,182
  -4,380
  -4,588
  -4,808
  -5,039
  -5,281
  -5,537
  -5,806
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
 
  2,574
  2,798
  2,983
  3,175
  3,375
  3,582
  3,797
  4,020
  4,251
  4,491
  4,165
  4,425
  4,694
  4,975
  5,267
  5,571
  5,888
  6,219
  6,563
  6,923
  7,299
  7,691
  8,102
  8,531
  8,979
  9,449
  9,940
  10,454
  10,993
  11,557
Discount rate, %
 
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
 
  2,401
  2,418
  2,372
  2,305
  2,219
  2,114
  1,992
  1,857
  1,712
  1,558
  1,230
  1,098
  966
  837
  714
  598
  492
  398
  315
  245
  186
  138
  100
  71
  49
  32
  21
  13
  8
  5
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Thermo Fisher Scientific Inc. develops, manufactures and sells a range of products. The Company provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It operates through four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. The Life Sciences Solutions segment provides a portfolio of reagents, instruments and consumables. The Analytical Instruments segment provides a range of instruments, consumables, software and services. The Specialty Diagnostics segment offers a range of diagnostic test kits, reagents, culture media, instruments and associated products. The Laboratory Products and Services segment offers controlled temperature technologies products, growth protection and separation products, and water and laboratory products.

FINANCIAL RATIOS  of  Thermo Fisher Scientific (TMO)

Valuation Ratios
P/E Ratio 41.9
Price to Sales 4.6
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 26.8
Price to Free Cash Flow 31.2
Growth Rates
Sales Growth Rate 7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5%
Cap. Spend. - 3 Yr. Gr. Rate 9.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 71.4%
Total Debt to Equity 77.2%
Interest Coverage 5
Management Effectiveness
Return On Assets 5.7%
Ret/ On Assets - 3 Yr. Avg. 5.9%
Return On Total Capital 5.6%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 9.4%
Return On Equity - 3 Yr. Avg. 9.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 45.8%
Gross Margin - 3 Yr. Avg. 45.3%
EBITDA Margin 23.2%
EBITDA Margin - 3 Yr. Avg. 24%
Operating Margin 13.4%
Oper. Margin - 3 Yr. Avg. 14%
Pre-Tax Margin 11.1%
Pre-Tax Margin - 3 Yr. Avg. 11.6%
Net Profit Margin 11.1%
Net Profit Margin - 3 Yr. Avg. 11.3%
Effective Tax Rate -0%
Eff/ Tax Rate - 3 Yr. Avg. 2.3%
Payout Ratio 11.8%

TMO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TMO stock intrinsic value calculation we used $18274 million for the last fiscal year's total revenue generated by Thermo Fisher Scientific. The default revenue input number comes from 2016 income statement of Thermo Fisher Scientific. 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 TMO stock valuation model: a) initial revenue growth rate of 7.7% 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 7.2%, whose default value for TMO is calculated based on our internal credit rating of Thermo Fisher Scientific, 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 Thermo Fisher Scientific.
    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 TMO stock the variable cost ratio is equal to 86.2%.

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 TMO 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 3.5% for Thermo Fisher Scientific.

Corporate tax rate of 27% is the nominal tax rate for Thermo Fisher Scientific. 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 TMO 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 TMO are equal to 86.9%.

Life of production assets of 20.5 years is the average useful life of capital assets used in Thermo Fisher Scientific 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 TMO is equal to 14.3%. 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 - $21539 million for Thermo Fisher Scientific - 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 401.622 million for Thermo Fisher Scientific 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 Thermo Fisher Scientific at the current share price and the inputted number of shares is $86.5 billion.

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COMPANY NEWS

▶ Thermo Fisher Scientific Just Within Buy Range As Earnings Approach   [Jan-17-18 03:00AM  Investor's Business Daily]
▶ At $210.17, Is Thermo Fisher Scientific Inc (NYSE:TMO) A Buy?   [Jan-16-18 04:24PM  Simply Wall St.]
▶ What Are Accelerate Diagnostics Key Strengths?   [Jan-15-18 09:02AM  Market Realist]
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▶ Baxter Internationals Profit Margins Expected to Expand   [Jan-09-18 04:00PM  Market Realist]
▶ Wall Street Shows Confidence in BAX Stock   [02:30PM  Market Realist]
▶ Thermo Fisher Scientific: A Growth Story (TMO)   [Jan-02-18 12:07PM  Investopedia]
▶ BDs Stock Price Performance after Recent 52-Week High   [Dec-29-17 03:36PM  Market Realist]
▶ TMOs Launch of New Research Assay for Cancer   [Dec-28-17 10:33AM  Market Realist]
▶ Banks, ChipsBitcoin Keeps Diving   [Dec-22-17 08:00AM  Investor's Business Daily]
▶ Better Buy: Illumina, Inc. vs. Thermo Fisher Scientific   [Dec-15-17 06:09AM  Motley Fool]
▶ Thermo Fisher Scientific Declares Quarterly Dividend   [Nov-09-17 04:30PM  PR Newswire]
▶ Buy Thermo Fisher On Amazon Fear-Inspired Dip   [Oct-30-17 02:28PM  Benzinga]
▶ Thermo Fisher beats Street 3Q forecasts   [06:09AM  Associated Press]
▶ Mass confusion over Obamacare plans   [10:11AM  Yahoo Finance Video]
Financial statements of TMO
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