DCF Tool

ELAN

Elanco Animal Health Inc – Pharmaceutical Preparation Manufacturing
Elanco Animal Health Incorporated is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders, and society as a whole. With nearly 70 years of animal health heritage, it is committed to helping its customers improve the health of animals in their care, while also making a meaningful impact on its local and global communities. It is driven by its vision of Food and Companionship Enriching Life and our Elanco Healthy Purposeā„¢ Sustainability/ESG Pledges - all to advance the health of animals, people and the planet.
Analysis Results
Intrinsic Value $50.95
Latest Price $24.27
Relative Value 52% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 14.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.784 0.734
2023 0.898 0.789
2024 1.03 0.847
2025 1.18 0.91
2026 1.35 0.978
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 29.4 billion. This corresponds to a present value of 19.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 4.26 billion. Adding in the terminal value gives a total present value of 24.2 billion.

There are presently 474.0 million outstanding shares, so the intrinsic value per share is 50.95.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 3,276,000,000
Current Cash 638,000,000
Current Liabilities 1,643,000,000
Current Debt 294,000,000
Non-Cash Working Capital (NCWC) 1,289,000,000
Change in NCWC -111,000,000
EBIT 302,000,000
Tax Provision -95,000,000
Depreciation and Amortization 716,000,000
Capital Expenditure -197,000,000
Unlevered Free Cash Flow 710,000,000
Current Assets 3,416,500,000
Current Cash 494,700,000
Current Liabilities 2,076,300,000
Current Debt 554,500,000
Non-Cash Working Capital (NCWC) 1,400,000,000
Change in NCWC 154,900,000
EBIT -76,800,000
Tax Provision -111,900,000
Depreciation and Amortization 516,900,000
Capital Expenditure -310,900,000
Unlevered Free Cash Flow 284,100,000
Current Assets 2,373,100,000
Current Cash 334,000,000
Current Liabilities 818,500,000
Current Debt 24,500,000
Non-Cash Working Capital (NCWC) 1,245,100,000
Change in NCWC 156,700,000
EBIT 370,000,000
Tax Provision 10,300,000
Depreciation and Amortization 314,500,000
Capital Expenditure -197,400,000
Unlevered Free Cash Flow 595,065,984
Current Assets 2,504,900,000
Current Cash 474,800,000
Current Liabilities 970,700,000
Current Debt 29,000,000
Non-Cash Working Capital (NCWC) 1,088,400,000
Change in NCWC -79,300,000
EBIT 313,800,000
Tax Provision 27,600,000
Depreciation and Amortization 296,000,000
Capital Expenditure -134,500,000
Unlevered Free Cash Flow 320,093,952
Current Assets 2,123,700,000
Current Cash 323,400,000
Current Liabilities 632,600,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,167,700,000
Change in NCWC 98,000,000
EBIT 142,400,000
Tax Provision 78,100,000
Depreciation and Amortization 318,400,000
Capital Expenditure -98,600,000
Unlevered Free Cash Flow 460,200,000

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