Intrinsic value of Walgreens Boots Alliance, Inc. - WBA

Previous Close

$52.57

  Intrinsic Value

$142.41

stock screener

  Rating & Target

str. buy

+171%

Previous close

$52.57

 
Intrinsic value

$142.41

 
Up/down potential

+171%

 
Rating

str. buy

We calculate the intrinsic value of WBA 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 49.6

 

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, %
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  144,559
  158,162
  172,348
  187,122
  202,493
  218,477
  235,090
  252,354
  270,295
  288,941
  308,325
  328,482
  349,452
  371,277
  394,003
  417,678
  442,354
  468,086
  494,933
  522,956
  552,219
  582,791
  614,743
  648,150
  683,090
  719,648
  757,909
  797,964
  839,908
  883,842
Variable operating expenses, $m
  135,023
  147,459
  160,427
  173,933
  187,986
  202,598
  217,785
  233,568
  249,969
  267,015
  281,865
  300,293
  319,463
  339,415
  360,191
  381,834
  404,393
  427,917
  452,460
  478,078
  504,830
  532,778
  561,988
  592,528
  624,470
  657,890
  692,867
  729,485
  767,830
  807,994
Fixed operating expenses, $m
  2,138
  2,185
  2,233
  2,282
  2,332
  2,384
  2,436
  2,490
  2,545
  2,601
  2,658
  2,716
  2,776
  2,837
  2,900
  2,963
  3,028
  3,095
  3,163
  3,233
  3,304
  3,377
  3,451
  3,527
  3,604
  3,684
  3,765
  3,848
  3,932
  4,019
Total operating expenses, $m
  137,161
  149,644
  162,660
  176,215
  190,318
  204,982
  220,221
  236,058
  252,514
  269,616
  284,523
  303,009
  322,239
  342,252
  363,091
  384,797
  407,421
  431,012
  455,623
  481,311
  508,134
  536,155
  565,439
  596,055
  628,074
  661,574
  696,632
  733,333
  771,762
  812,013
Operating income, $m
  7,398
  8,518
  9,687
  10,906
  12,175
  13,495
  14,869
  16,297
  17,782
  19,326
  23,802
  25,473
  27,213
  29,025
  30,912
  32,880
  34,933
  37,075
  39,310
  41,646
  44,086
  46,637
  49,304
  52,095
  55,016
  58,074
  61,276
  64,631
  68,146
  71,830
EBITDA, $m
  11,564
  12,806
  14,102
  15,454
  16,860
  18,324
  19,846
  21,429
  23,075
  24,786
  26,566
  28,418
  30,346
  32,353
  34,445
  36,625
  38,899
  41,271
  43,748
  46,334
  49,037
  51,862
  54,816
  57,906
  61,140
  64,526
  68,071
  71,785
  75,676
  79,754
Interest expense (income), $m
  0
  777
  1,001
  1,237
  1,482
  1,737
  2,003
  2,279
  2,566
  2,864
  3,174
  3,497
  3,832
  4,180
  4,542
  4,920
  5,312
  5,722
  6,148
  6,593
  7,057
  7,541
  8,047
  8,575
  9,127
  9,705
  10,308
  10,940
  11,601
  12,294
  13,019
Earnings before tax, $m
  6,620
  7,517
  8,451
  9,425
  10,438
  11,493
  12,590
  13,731
  14,917
  16,151
  20,305
  21,641
  23,033
  24,482
  25,993
  27,568
  29,211
  30,927
  32,718
  34,589
  36,545
  38,590
  40,729
  42,968
  45,312
  47,766
  50,336
  53,030
  55,852
  58,811
Tax expense, $m
  1,788
  2,030
  2,282
  2,545
  2,818
  3,103
  3,399
  3,707
  4,028
  4,361
  5,482
  5,843
  6,219
  6,610
  7,018
  7,443
  7,887
  8,350
  8,834
  9,339
  9,867
  10,419
  10,997
  11,601
  12,234
  12,897
  13,591
  14,318
  15,080
  15,879
Net income, $m
  4,833
  5,487
  6,169
  6,880
  7,620
  8,390
  9,191
  10,023
  10,890
  11,790
  14,823
  15,798
  16,814
  17,872
  18,975
  20,125
  21,324
  22,576
  23,884
  25,250
  26,678
  28,171
  29,732
  31,367
  33,077
  34,869
  36,745
  38,712
  40,772
  42,932

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
  74,862
  81,907
  89,253
  96,904
  104,865
  113,142
  121,745
  130,686
  139,977
  149,633
  159,671
  170,110
  180,969
  192,272
  204,041
  216,301
  229,080
  242,406
  256,309
  270,821
  285,976
  301,808
  318,355
  335,655
  353,750
  372,681
  392,495
  413,238
  434,960
  457,712
Adjusted assets (=assets-cash), $m
  74,862
  81,907
  89,253
  96,904
  104,865
  113,142
  121,745
  130,686
  139,977
  149,633
  159,671
  170,110
  180,969
  192,272
  204,041
  216,301
  229,080
  242,406
  256,309
  270,821
  285,976
  301,808
  318,355
  335,655
  353,750
  372,681
  392,495
  413,238
  434,960
  457,712
Revenue / Adjusted assets
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
  1.931
Average production assets, $m
  30,068
  32,898
  35,848
  38,921
  42,119
  45,443
  48,899
  52,490
  56,221
  60,100
  64,132
  68,324
  72,686
  77,226
  81,953
  86,877
  92,010
  97,362
  102,946
  108,775
  114,862
  121,221
  127,866
  134,815
  142,083
  149,687
  157,645
  165,976
  174,701
  183,839
Working capital, $m
  -2,891
  -3,163
  -3,447
  -3,742
  -4,050
  -4,370
  -4,702
  -5,047
  -5,406
  -5,779
  -6,166
  -6,570
  -6,989
  -7,426
  -7,880
  -8,354
  -8,847
  -9,362
  -9,899
  -10,459
  -11,044
  -11,656
  -12,295
  -12,963
  -13,662
  -14,393
  -15,158
  -15,959
  -16,798
  -17,677
Total debt, $m
  18,545
  22,898
  27,438
  32,167
  37,086
  42,202
  47,519
  53,044
  58,786
  64,753
  70,957
  77,408
  84,119
  91,104
  98,377
  105,954
  113,852
  122,087
  130,679
  139,648
  149,013
  158,797
  169,023
  179,715
  190,897
  202,597
  214,842
  227,661
  241,085
  255,146
Total liabilities, $m
  46,265
  50,618
  55,158
  59,887
  64,806
  69,922
  75,239
  80,764
  86,506
  92,473
  98,677
  105,128
  111,839
  118,824
  126,097
  133,674
  141,572
  149,807
  158,399
  167,368
  176,733
  186,517
  196,743
  207,435
  218,617
  230,317
  242,562
  255,381
  268,805
  282,866
Total equity, $m
  28,597
  31,288
  34,095
  37,017
  40,058
  43,220
  46,507
  49,922
  53,471
  57,160
  60,994
  64,982
  69,130
  73,448
  77,944
  82,627
  87,509
  92,599
  97,910
  103,454
  109,243
  115,291
  121,611
  128,220
  135,132
  142,364
  149,933
  157,857
  166,155
  174,846
Total liabilities and equity, $m
  74,862
  81,906
  89,253
  96,904
  104,864
  113,142
  121,746
  130,686
  139,977
  149,633
  159,671
  170,110
  180,969
  192,272
  204,041
  216,301
  229,081
  242,406
  256,309
  270,822
  285,976
  301,808
  318,354
  335,655
  353,749
  372,681
  392,495
  413,238
  434,960
  457,712
Debt-to-equity ratio
  0.650
  0.730
  0.800
  0.870
  0.930
  0.980
  1.020
  1.060
  1.100
  1.130
  1.160
  1.190
  1.220
  1.240
  1.260
  1.280
  1.300
  1.320
  1.330
  1.350
  1.360
  1.380
  1.390
  1.400
  1.410
  1.420
  1.430
  1.440
  1.450
  1.460
Adjusted equity ratio
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,833
  5,487
  6,169
  6,880
  7,620
  8,390
  9,191
  10,023
  10,890
  11,790
  14,823
  15,798
  16,814
  17,872
  18,975
  20,125
  21,324
  22,576
  23,884
  25,250
  26,678
  28,171
  29,732
  31,367
  33,077
  34,869
  36,745
  38,712
  40,772
  42,932
Depreciation, amort., depletion, $m
  4,166
  4,288
  4,415
  4,547
  4,685
  4,828
  4,977
  5,132
  5,293
  5,460
  2,764
  2,945
  3,133
  3,329
  3,532
  3,745
  3,966
  4,197
  4,437
  4,689
  4,951
  5,225
  5,511
  5,811
  6,124
  6,452
  6,795
  7,154
  7,530
  7,924
Funds from operations, $m
  8,999
  9,775
  10,584
  11,427
  12,305
  13,218
  14,168
  15,156
  16,183
  17,251
  17,587
  18,743
  19,947
  21,201
  22,507
  23,869
  25,290
  26,773
  28,321
  29,938
  31,629
  33,396
  35,244
  37,178
  39,202
  41,321
  43,540
  45,866
  48,302
  50,856
Change in working capital, $m
  -260
  -272
  -284
  -295
  -307
  -320
  -332
  -345
  -359
  -373
  -388
  -403
  -419
  -437
  -455
  -474
  -494
  -515
  -537
  -560
  -585
  -611
  -639
  -668
  -699
  -731
  -765
  -801
  -839
  -879
Cash from operations, $m
  9,259
  10,047
  10,868
  11,723
  12,612
  13,538
  14,500
  15,501
  16,541
  17,624
  17,975
  19,146
  20,366
  21,637
  22,962
  24,343
  25,784
  27,288
  28,858
  30,499
  32,214
  34,007
  35,883
  37,846
  39,901
  42,052
  44,306
  46,667
  49,141
  51,735
Maintenance CAPEX, $m
  -1,181
  -1,296
  -1,418
  -1,545
  -1,678
  -1,815
  -1,959
  -2,108
  -2,262
  -2,423
  -2,591
  -2,764
  -2,945
  -3,133
  -3,329
  -3,532
  -3,745
  -3,966
  -4,197
  -4,437
  -4,689
  -4,951
  -5,225
  -5,511
  -5,811
  -6,124
  -6,452
  -6,795
  -7,154
  -7,530
New CAPEX, $m
  -2,671
  -2,829
  -2,951
  -3,073
  -3,197
  -3,325
  -3,456
  -3,591
  -3,732
  -3,878
  -4,032
  -4,193
  -4,362
  -4,540
  -4,727
  -4,924
  -5,133
  -5,352
  -5,584
  -5,829
  -6,087
  -6,359
  -6,646
  -6,949
  -7,268
  -7,604
  -7,958
  -8,331
  -8,724
  -9,138
Cash from investing activities, $m
  -3,852
  -4,125
  -4,369
  -4,618
  -4,875
  -5,140
  -5,415
  -5,699
  -5,994
  -6,301
  -6,623
  -6,957
  -7,307
  -7,673
  -8,056
  -8,456
  -8,878
  -9,318
  -9,781
  -10,266
  -10,776
  -11,310
  -11,871
  -12,460
  -13,079
  -13,728
  -14,410
  -15,126
  -15,878
  -16,668
Free cash flow, $m
  5,408
  5,922
  6,499
  7,105
  7,737
  8,398
  9,086
  9,802
  10,547
  11,322
  11,352
  12,189
  13,060
  13,965
  14,906
  15,886
  16,906
  17,969
  19,077
  20,233
  21,439
  22,697
  24,012
  25,386
  26,822
  28,324
  29,895
  31,540
  33,263
  35,066
Issuance/(repayment) of debt, $m
  4,148
  4,354
  4,540
  4,728
  4,920
  5,115
  5,317
  5,525
  5,742
  5,967
  6,204
  6,451
  6,711
  6,985
  7,273
  7,577
  7,897
  8,235
  8,592
  8,968
  9,365
  9,784
  10,226
  10,692
  11,183
  11,700
  12,245
  12,819
  13,424
  14,061
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  4,148
  4,354
  4,540
  4,728
  4,920
  5,115
  5,317
  5,525
  5,742
  5,967
  6,204
  6,451
  6,711
  6,985
  7,273
  7,577
  7,897
  8,235
  8,592
  8,968
  9,365
  9,784
  10,226
  10,692
  11,183
  11,700
  12,245
  12,819
  13,424
  14,061
Total cash flow (excl. dividends), $m
  9,556
  10,275
  11,039
  11,833
  12,657
  13,513
  14,403
  15,327
  16,289
  17,289
  17,556
  18,640
  19,771
  20,950
  22,179
  23,463
  24,804
  26,205
  27,669
  29,201
  30,804
  32,481
  34,238
  36,077
  38,004
  40,024
  42,140
  44,360
  46,687
  49,127
Retained Cash Flow (-), $m
  -2,590
  -2,691
  -2,806
  -2,923
  -3,041
  -3,162
  -3,286
  -3,415
  -3,549
  -3,689
  -3,835
  -3,988
  -4,148
  -4,318
  -4,496
  -4,684
  -4,882
  -5,091
  -5,311
  -5,544
  -5,789
  -6,048
  -6,321
  -6,609
  -6,912
  -7,232
  -7,569
  -7,924
  -8,298
  -8,691
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
  6,965
  7,584
  8,233
  8,910
  9,616
  10,351
  11,116
  11,912
  12,740
  13,601
  13,721
  14,653
  15,622
  16,632
  17,684
  18,779
  19,922
  21,114
  22,358
  23,658
  25,015
  26,434
  27,917
  29,469
  31,092
  32,792
  34,572
  36,436
  38,389
  40,436
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
  6,678
  6,943
  7,165
  7,337
  7,454
  7,512
  7,510
  7,445
  7,318
  7,130
  6,516
  6,253
  5,940
  5,584
  5,192
  4,772
  4,335
  3,888
  3,443
  3,006
  2,587
  2,193
  1,830
  1,501
  1,210
  957
  742
  564
  419
  304
Current shareholders' claim on cash, %
  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

Walgreens Boots Alliance, Inc. is a holding company. The Company is a pharmacy-led health and wellbeing company. The Company operates through three segments: Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Retail Pharmacy USA segment consists of the Walgreen Co. (Walgreens) business, which includes the operation of retail drugstores, care clinics and providing specialty pharmacy services. The Retail Pharmacy International segment consists primarily of the Alliance Boots pharmacy-led health and beauty stores, optical practices and related contract manufacturing operations. The Pharmaceutical Wholesale segment consists of the Alliance Boots pharmaceutical wholesaling and distribution businesses. The Company's portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as global health and beauty product brands, including No7, Botanics, Liz Earle and Soap & Glory. _tck('aft');

FINANCIAL RATIOS  of  Walgreens Boots Alliance, Inc. (WBA)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

WBA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WBA stock intrinsic value calculation we used $131537 million for the last fiscal year's total revenue generated by Walgreens Boots Alliance, Inc.. The default revenue input number comes from 0001 income statement of Walgreens Boots Alliance, Inc.. 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 WBA stock valuation model: a) initial revenue growth rate of 9.9% 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 WBA is calculated based on our internal credit rating of Walgreens Boots Alliance, Inc., 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 Walgreens Boots Alliance, Inc..
    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 WBA stock the variable cost ratio is equal to 93.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2092 million in the base year in the intrinsic value calculation for WBA 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 Walgreens Boots Alliance, Inc..

Corporate tax rate of 27% is the nominal tax rate for Walgreens Boots Alliance, Inc.. 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 WBA 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 WBA are equal to 20.8%.

Life of production assets of 23.2 years is the average useful life of capital assets used in Walgreens Boots Alliance, Inc. 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 WBA is equal to -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 - $26007 million for Walgreens Boots Alliance, Inc. - 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 943.478 million for Walgreens Boots Alliance, Inc. 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 Walgreens Boots Alliance, Inc. at the current share price and the inputted number of shares is $49.6 billion.

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