Intrinsic value of IHS Markit - INFO

Previous Close

$44.03

  Intrinsic Value

$41.52

stock screener

  Rating & Target

hold

-6%

Previous close

$44.03

 
Intrinsic value

$41.52

 
Up/down potential

-6%

 
Rating

hold

We calculate the intrinsic value of INFO 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 17.6

 

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, %
  145.73
  24.80
  22.82
  21.04
  19.43
  17.99
  16.69
  15.52
  14.47
  13.52
  12.67
  11.90
  11.21
  10.59
  10.03
  9.53
  9.08
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
Revenue, $m
  2,735
  3,413
  4,192
  5,074
  6,060
  7,151
  8,344
  9,639
  11,034
  12,526
  14,114
  15,794
  17,565
  19,425
  21,374
  23,411
  25,536
  27,749
  30,053
  32,449
  34,939
  37,527
  40,217
  43,012
  45,917
  48,938
  52,081
  55,351
  58,756
  62,303
  65,999
Variable operating expenses, $m
 
  2,438
  2,807
  3,225
  3,692
  4,209
  4,775
  5,388
  6,049
  6,756
  7,508
  7,483
  8,322
  9,204
  10,127
  11,092
  12,099
  13,148
  14,240
  15,375
  16,555
  17,781
  19,055
  20,380
  21,756
  23,188
  24,677
  26,226
  27,840
  29,520
  31,271
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
  2,474
  2,438
  2,807
  3,225
  3,692
  4,209
  4,775
  5,388
  6,049
  6,756
  7,508
  7,483
  8,322
  9,204
  10,127
  11,092
  12,099
  13,148
  14,240
  15,375
  16,555
  17,781
  19,055
  20,380
  21,756
  23,188
  24,677
  26,226
  27,840
  29,520
  31,271
Operating income, $m
  260
  975
  1,385
  1,849
  2,368
  2,941
  3,570
  4,251
  4,985
  5,770
  6,605
  8,310
  9,242
  10,221
  11,247
  12,318
  13,436
  14,601
  15,813
  17,074
  18,384
  19,746
  21,161
  22,632
  24,161
  25,750
  27,404
  29,125
  30,916
  32,783
  34,727
EBITDA, $m
  596
  1,940
  2,383
  2,884
  3,445
  4,064
  4,743
  5,479
  6,272
  7,120
  8,022
  8,977
  9,984
  11,041
  12,149
  13,306
  14,514
  15,773
  17,082
  18,444
  19,859
  21,330
  22,859
  24,448
  26,099
  27,816
  29,602
  31,461
  33,396
  35,412
  37,513
Interest expense (income), $m
  103
  161
  231
  312
  403
  504
  617
  740
  874
  1,018
  1,172
  1,335
  1,509
  1,692
  1,884
  2,085
  2,295
  2,514
  2,743
  2,980
  3,228
  3,485
  3,752
  4,029
  4,318
  4,618
  4,929
  5,254
  5,591
  5,942
  6,308
Earnings before tax, $m
  142
  814
  1,154
  1,537
  1,965
  2,437
  2,953
  3,511
  4,111
  4,752
  5,434
  6,975
  7,733
  8,529
  9,363
  10,234
  11,142
  12,087
  13,071
  14,094
  15,157
  16,262
  17,410
  18,603
  19,843
  21,133
  22,475
  23,871
  25,325
  26,840
  28,419
Tax expense, $m
  -5
  220
  311
  415
  531
  658
  797
  948
  1,110
  1,283
  1,467
  1,883
  2,088
  2,303
  2,528
  2,763
  3,008
  3,263
  3,529
  3,805
  4,092
  4,391
  4,701
  5,023
  5,358
  5,706
  6,068
  6,445
  6,838
  7,247
  7,673
Net income, $m
  153
  594
  842
  1,122
  1,435
  1,779
  2,155
  2,563
  3,001
  3,469
  3,967
  5,092
  5,645
  6,227
  6,835
  7,471
  8,133
  8,824
  9,542
  10,288
  11,064
  11,871
  12,709
  13,580
  14,485
  15,427
  16,407
  17,426
  18,487
  19,593
  20,746

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  139
  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
  13,937
  17,239
  21,173
  25,627
  30,607
  36,114
  42,142
  48,683
  55,728
  63,264
  71,280
  79,766
  88,710
  98,106
  107,949
  118,236
  128,968
  140,148
  151,784
  163,884
  176,461
  189,532
  203,115
  217,231
  231,905
  247,163
  263,034
  279,551
  296,747
  314,659
  333,327
Adjusted assets (=assets-cash), $m
  13,798
  17,239
  21,173
  25,627
  30,607
  36,114
  42,142
  48,683
  55,728
  63,264
  71,280
  79,766
  88,710
  98,106
  107,949
  118,236
  128,968
  140,148
  151,784
  163,884
  176,461
  189,532
  203,115
  217,231
  231,905
  247,163
  263,034
  279,551
  296,747
  314,659
  333,327
Revenue / Adjusted assets
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
  0.198
Average production assets, $m
  2,770
  3,458
  4,247
  5,140
  6,139
  7,244
  8,453
  9,765
  11,178
  12,689
  14,297
  15,999
  17,793
  19,678
  21,652
  23,715
  25,868
  28,110
  30,444
  32,871
  35,394
  38,015
  40,740
  43,571
  46,514
  49,574
  52,758
  56,071
  59,520
  63,112
  66,857
Working capital, $m
  -478
  -638
  -784
  -949
  -1,133
  -1,337
  -1,560
  -1,803
  -2,063
  -2,342
  -2,639
  -2,953
  -3,285
  -3,632
  -3,997
  -4,378
  -4,775
  -5,189
  -5,620
  -6,068
  -6,534
  -7,018
  -7,521
  -8,043
  -8,587
  -9,151
  -9,739
  -10,351
  -10,987
  -11,651
  -12,342
Total debt, $m
  3,384
  4,720
  6,360
  8,217
  10,294
  12,590
  15,104
  17,832
  20,770
  23,912
  27,255
  30,793
  34,523
  38,441
  42,546
  46,836
  51,311
  55,973
  60,825
  65,870
  71,115
  76,566
  82,230
  88,116
  94,235
  100,598
  107,216
  114,104
  121,274
  128,744
  136,528
Total liabilities, $m
  5,852
  7,189
  8,829
  10,686
  12,763
  15,059
  17,573
  20,301
  23,239
  26,381
  29,724
  33,262
  36,992
  40,910
  45,015
  49,305
  53,780
  58,442
  63,294
  68,339
  73,584
  79,035
  84,699
  90,585
  96,704
  103,067
  109,685
  116,573
  123,743
  131,213
  138,997
Total equity, $m
  8,084
  10,050
  12,344
  14,941
  17,844
  21,054
  24,569
  28,382
  32,489
  36,883
  41,557
  46,503
  51,718
  57,196
  62,934
  68,932
  75,188
  81,707
  88,490
  95,544
  102,877
  110,497
  118,416
  126,646
  135,200
  144,096
  153,349
  162,978
  173,003
  183,446
  194,329
Total liabilities and equity, $m
  13,936
  17,239
  21,173
  25,627
  30,607
  36,113
  42,142
  48,683
  55,728
  63,264
  71,281
  79,765
  88,710
  98,106
  107,949
  118,237
  128,968
  140,149
  151,784
  163,883
  176,461
  189,532
  203,115
  217,231
  231,904
  247,163
  263,034
  279,551
  296,746
  314,659
  333,326
Debt-to-equity ratio
  0.419
  0.470
  0.520
  0.550
  0.580
  0.600
  0.610
  0.630
  0.640
  0.650
  0.660
  0.660
  0.670
  0.670
  0.680
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
Adjusted equity ratio
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583
  0.583

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  153
  594
  842
  1,122
  1,435
  1,779
  2,155
  2,563
  3,001
  3,469
  3,967
  5,092
  5,645
  6,227
  6,835
  7,471
  8,133
  8,824
  9,542
  10,288
  11,064
  11,871
  12,709
  13,580
  14,485
  15,427
  16,407
  17,426
  18,487
  19,593
  20,746
Depreciation, amort., depletion, $m
  336
  965
  998
  1,035
  1,077
  1,123
  1,173
  1,228
  1,287
  1,350
  1,417
  667
  741
  820
  902
  988
  1,078
  1,171
  1,268
  1,370
  1,475
  1,584
  1,697
  1,815
  1,938
  2,066
  2,198
  2,336
  2,480
  2,630
  2,786
Funds from operations, $m
  615
  1,560
  1,840
  2,157
  2,511
  2,902
  3,329
  3,791
  4,288
  4,819
  5,383
  5,758
  6,387
  7,046
  7,737
  8,459
  9,211
  9,995
  10,810
  11,658
  12,539
  13,455
  14,407
  15,395
  16,424
  17,493
  18,605
  19,762
  20,967
  22,223
  23,532
Change in working capital, $m
  -23
  -127
  -146
  -165
  -184
  -204
  -223
  -242
  -261
  -279
  -297
  -314
  -331
  -348
  -364
  -381
  -397
  -414
  -431
  -448
  -466
  -484
  -503
  -523
  -543
  -565
  -588
  -612
  -637
  -663
  -691
Cash from operations, $m
  638
  1,686
  1,986
  2,322
  2,696
  3,106
  3,552
  4,033
  4,549
  5,098
  5,680
  6,072
  6,718
  7,394
  8,102
  8,840
  9,608
  10,409
  11,241
  12,106
  13,005
  13,939
  14,909
  15,918
  16,967
  18,058
  19,192
  20,374
  21,604
  22,886
  24,223
Maintenance CAPEX, $m
  0
  -115
  -144
  -177
  -214
  -256
  -302
  -352
  -407
  -466
  -529
  -596
  -667
  -741
  -820
  -902
  -988
  -1,078
  -1,171
  -1,268
  -1,370
  -1,475
  -1,584
  -1,697
  -1,815
  -1,938
  -2,066
  -2,198
  -2,336
  -2,480
  -2,630
New CAPEX, $m
  -148
  -688
  -789
  -893
  -999
  -1,104
  -1,209
  -1,312
  -1,413
  -1,512
  -1,608
  -1,702
  -1,794
  -1,885
  -1,974
  -2,063
  -2,153
  -2,242
  -2,334
  -2,427
  -2,523
  -2,622
  -2,724
  -2,831
  -2,943
  -3,060
  -3,183
  -3,313
  -3,449
  -3,593
  -3,744
Cash from investing activities, $m
  -983
  -803
  -933
  -1,070
  -1,213
  -1,360
  -1,511
  -1,664
  -1,820
  -1,978
  -2,137
  -2,298
  -2,461
  -2,626
  -2,794
  -2,965
  -3,141
  -3,320
  -3,505
  -3,695
  -3,893
  -4,097
  -4,308
  -4,528
  -4,758
  -4,998
  -5,249
  -5,511
  -5,785
  -6,073
  -6,374
Free cash flow, $m
  -345
  883
  1,053
  1,252
  1,483
  1,746
  2,041
  2,369
  2,729
  3,121
  3,543
  3,775
  4,257
  4,768
  5,307
  5,874
  6,468
  7,088
  7,736
  8,411
  9,113
  9,842
  10,601
  11,389
  12,208
  13,059
  13,943
  14,863
  15,819
  16,813
  17,849
Issuance/(repayment) of debt, $m
  653
  1,441
  1,640
  1,857
  2,077
  2,296
  2,514
  2,728
  2,938
  3,143
  3,343
  3,538
  3,730
  3,918
  4,104
  4,290
  4,475
  4,662
  4,852
  5,046
  5,245
  5,451
  5,664
  5,886
  6,119
  6,363
  6,618
  6,887
  7,171
  7,469
  7,784
Issuance/(repurchase) of shares, $m
  -459
  1,406
  1,451
  1,475
  1,469
  1,431
  1,359
  1,251
  1,106
  924
  707
  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  
  178
  2,847
  3,091
  3,332
  3,546
  3,727
  3,873
  3,979
  4,044
  4,067
  4,050
  3,538
  3,730
  3,918
  4,104
  4,290
  4,475
  4,662
  4,852
  5,046
  5,245
  5,451
  5,664
  5,886
  6,119
  6,363
  6,618
  6,887
  7,171
  7,469
  7,784
Total cash flow (excl. dividends), $m
  -154
  3,730
  4,144
  4,584
  5,028
  5,473
  5,914
  6,347
  6,772
  7,188
  7,593
  7,313
  7,987
  8,687
  9,412
  10,164
  10,943
  11,751
  12,588
  13,456
  14,357
  15,293
  16,265
  17,276
  18,327
  19,422
  20,562
  21,750
  22,990
  24,283
  25,633
Retained Cash Flow (-), $m
  -6,008
  -2,000
  -2,293
  -2,597
  -2,904
  -3,210
  -3,514
  -3,814
  -4,107
  -4,394
  -4,673
  -4,947
  -5,215
  -5,478
  -5,738
  -5,997
  -6,257
  -6,518
  -6,783
  -7,054
  -7,333
  -7,620
  -7,919
  -8,230
  -8,555
  -8,895
  -9,253
  -9,629
  -10,025
  -10,443
  -10,883
Prev. year cash balance distribution, $m
 
  34
  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
 
  1,763
  1,851
  1,987
  2,125
  2,263
  2,399
  2,534
  2,665
  2,794
  2,920
  2,366
  2,772
  3,209
  3,674
  4,166
  4,686
  5,233
  5,805
  6,402
  7,025
  7,673
  8,346
  9,046
  9,772
  10,526
  11,309
  12,121
  12,964
  13,840
  14,750
Discount rate, %
 
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
 
  1,657
  1,625
  1,620
  1,597
  1,556
  1,498
  1,424
  1,337
  1,239
  1,133
  795
  797
  780
  745
  696
  635
  567
  494
  421
  350
  285
  226
  175
  132
  97
  69
  48
  32
  21
  13
Current shareholders' claim on cash, %
  100
  92.6
  86.8
  82.3
  78.7
  75.9
  73.7
  72.0
  70.8
  69.8
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2
  69.2

IHS Markit Ltd., formerly Markit Ltd., is a provider of critical information and analytics for the major industries, financial markets and governments. The Company operates through four segments: Resources, Transportation, Consolidated Markets & Solutions (CMS) and Financial Services. The Resources segment includes its energy and chemicals product offerings. Its energy offerings are focused on upstream, midstream, downstream and power/gas/coal/renewables (PGCR) services. The Transportation segment includes its aerospace, defense and security (AD&S); automotive, and maritime and trade (M&T) product offerings. The CMS segment includes its product design; technology, media and telecommunication, and economics and country risk (ECR) product offerings. The Company's Financial Services segment provides pricing and reference data, indices, valuation and trading services, trade processing, enterprise software and managed services.

FINANCIAL RATIOS  of  IHS Markit (INFO)

Valuation Ratios
P/E Ratio 119.4
Price to Sales 6.7
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 28.6
Price to Free Cash Flow 37.3
Growth Rates
Sales Growth Rate 145.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.5%
Cap. Spend. - 3 Yr. Gr. Rate 2.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 40.6%
Total Debt to Equity 41.9%
Interest Coverage 2
Management Effectiveness
Return On Assets 3%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 2.1%
Ret/ On T. Cap. - 3 Yr. Avg. 4.6%
Return On Equity 3%
Return On Equity - 3 Yr. Avg. 5.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 62%
Gross Margin - 3 Yr. Avg. 20.7%
EBITDA Margin 21.2%
EBITDA Margin - 3 Yr. Avg. 31.1%
Operating Margin 9.5%
Oper. Margin - 3 Yr. Avg. 18.3%
Pre-Tax Margin 5.2%
Pre-Tax Margin - 3 Yr. Avg. 15.3%
Net Profit Margin 5.6%
Net Profit Margin - 3 Yr. Avg. 11.6%
Effective Tax Rate -3.5%
Eff/ Tax Rate - 3 Yr. Avg. 17.9%
Payout Ratio 0%

INFO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INFO stock intrinsic value calculation we used $2735 million for the last fiscal year's total revenue generated by IHS Markit. The default revenue input number comes from 2016 income statement of IHS Markit. 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 INFO stock valuation model: a) initial revenue growth rate of 24.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.4%, whose default value for INFO is calculated based on our internal credit rating of IHS Markit, 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 IHS Markit.
    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 INFO stock the variable cost ratio is equal to 77.4%.

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 INFO 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 4.9% for IHS Markit.

Corporate tax rate of 27% is the nominal tax rate for IHS Markit. 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 INFO 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 INFO are equal to 101.3%.

Life of production assets of 24 years is the average useful life of capital assets used in IHS Markit 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 INFO is equal to -18.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8084 million for IHS Markit - 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 398.819 million for IHS Markit 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 IHS Markit at the current share price and the inputted number of shares is $17.6 billion.

RELATED COMPANIES Price Int.Val. Rating
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RENX RELX ADR 21.92 24.35  hold
MORN Morningstar 85.09 142.25  str.buy
FDS FactSet Resear 185.76 311.40  str.buy
SPGI S&P Global 161.55 48.45  str.sell
MSCI MSCI 122.00 33.29  str.sell
BLK BlackRock 476.62 2,347.68  str.buy

COMPANY NEWS

▶ ETFs with exposure to IHS Markit Ltd. : October 9, 2017   [Oct-09-17 11:39AM  Capital Cube]
▶ [$$] High Yield CDX Credit Derivative Indexes - Week Ended Oct. 5, 2017   [Oct-06-17 10:35AM  The Wall Street Journal]
▶ GBP Suffers on Poor Data   [03:30AM  FX Empire]
▶ IHS Markit tops Street 3Q forecasts   [Sep-26-17 11:10PM  Associated Press]
▶ [$$] JMI Sells automotiveMastermind to IHS Markit   [11:36AM  The Wall Street Journal]
▶ Equifax CEO Richard Smith is out   [10:30AM  Yahoo Finance Video]
▶ IHS Markit Hurricane Update (September 20, 2017)   [Sep-20-17 10:25AM  Business Wire]
▶ Flood Cars In The U.S. Jump 20% Since Last Year   [Sep-13-17 01:45PM  PR Newswire]
▶ Equifax shares plummet on announcement of massive data breach   [Sep-08-17 01:14PM  Yahoo Finance Video]
▶ Markets fall as Irma approaches Florida   [09:04AM  Yahoo Finance]
▶ IHS Markit Hurricane Harvey Update (September 6, 2017)   [Sep-06-17 09:52AM  Business Wire]
▶ IHS Markit Hurricane Harvey Update (September, 1 2017)   [Sep-01-17 07:00PM  Business Wire]
▶ IHS Markit Hurricane Harvey Update (August 31, 2017)   [Aug-31-17 10:52AM  Business Wire]
▶ Infosys Founders Stage Dramatic Coup to Win Back Company   [Aug-24-17 11:14PM  Bloomberg Video]
▶ IHS Markit Launches Compliance Service for RTS 28   [Aug-22-17 07:23AM  Business Wire]
▶ Tumult at Infosys as CEO Quits   [Aug-20-17 11:08PM  Bloomberg Video]
▶ Apex's Pande on Infosys' Corporate Governance   [09:30PM  Bloomberg Video]
▶ Infosys Lags Overall Indian Market   [09:05PM  Bloomberg Video]
▶ Reboot or Booted? Infosys Must Choose   [07:00PM  Bloomberg]
Financial statements of INFO
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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