PNR Intrinsic Value

PNR

Pentair plc – Fluid Power Valve and Hose Fitting Manufacturing

pentair plc (nyse: pnr) is a global water, fluid, thermal management and equipment protection partner with industry leading products, services, and solutions. with 2014 revenues of $7.0 billion, pentair employs approximately 30,000 people worldwide. we report the performance of our business within four global operating segments: valves & controls, flow & filtration solutions, water quality systems, and technical solutions. valves & controls designs, manufactures, markets, and services valves, fittings, automation and controls, and actuators for the energy and industrial verticals. process technologies designs, manufactures, markets, and services innovative water system products and solutions to meet filtration, separation, and fluid process management challenges in food and beverage, water, wastewater, swimming pools, and aquaculture applications. flow technologies designs, manufactures, and markets products and services designed for the transfer and flow of clean water, wa

Analysis Results

Intrinsic Value	$47.04
Latest Price	$66.28
Relative Value	41% overvalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 -6.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -6.1%, 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)
2023	0.346	0.333
2024	0.325	0.301
2025	0.305	0.272
2026	0.286	0.245
2027	0.269	0.222

Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 8.07 billion. This corresponds to a present value of 6.4 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1.37 billion. Adding in the terminal value gives a total present value of 7.78 billion.

There are presently 165.0 million outstanding shares, so the intrinsic value per share is 47.04.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	1,558,500,000
Current Cash	108,900,000
Current Liabilities	1,063,100,000
Current Debt	0
Non-Cash Working Capital (NCWC)	386,500,000
Change in NCWC	228,700,000
EBIT	595,300,000
Tax Provision	67,400,000
Depreciation and Amortization	106,600,000
Capital Expenditure	-85,200,000
Unlevered Free Cash Flow	772,528,187

Current Assets	1,304,000,000
Current Cash	94,500,000
Current Liabilities	1,051,700,000
Current Debt	0
Non-Cash Working Capital (NCWC)	157,800,000
Change in NCWC	37,300,000
EBIT	636,900,000
Tax Provision	70,800,000
Depreciation and Amortization	77,500,000
Capital Expenditure	-60,200,000
Unlevered Free Cash Flow	619,559,157

Current Assets	975,100,000
Current Cash	82,100,000
Current Liabilities	772,500,000
Current Debt	0
Non-Cash Working Capital (NCWC)	120,500,000
Change in NCWC	-109,900,000
EBIT	461,400,000
Tax Provision	75,000,000
Depreciation and Amortization	75,100,000
Capital Expenditure	-62,200,000
Unlevered Free Cash Flow	284,314,371

Current Assets	1,061,900,000
Current Cash	82,500,000
Current Liabilities	749,000,000
Current Debt	0
Non-Cash Working Capital (NCWC)	230,400,000
Change in NCWC	84,000,000
EBIT	432,500,000
Tax Provision	45,800,000
Depreciation and Amortization	80,000,000
Capital Expenditure	-58,500,000
Unlevered Free Cash Flow	489,390,184

Current Assets	1,039,400,000
Current Cash	74,300,000
Current Liabilities	818,700,000
Current Debt	0
Non-Cash Working Capital (NCWC)	146,400,000
Change in NCWC	-289,700,000
EBIT	436,700,000
Tax Provision	58,100,000
Depreciation and Amortization	84,600,000
Capital Expenditure	-48,200,000
Unlevered Free Cash Flow	116,595,708

Current Assets	1,748,800,000
Current Cash	113,300,000
Current Liabilities	1,199,400,000
Current Debt	0
Non-Cash Working Capital (NCWC)	436,100,000
Change in NCWC	-527,000,000
EBIT	682,100,000
Tax Provision	9,200,000
Depreciation and Amortization	182,900,000
Capital Expenditure	-70,900,000
Unlevered Free Cash Flow	254,272,281

Current Assets	2,672,000,000
Current Cash	238,500,000
Current Liabilities	1,471,200,000
Current Debt	800,000
Non-Cash Working Capital (NCWC)	963,100,000
Change in NCWC	-205,400,000
EBIT	705,000,000
Tax Provision	109,400,000
Depreciation and Amortization	181,000,000
Capital Expenditure	-117,800,000
Unlevered Free Cash Flow	425,318,716

Current Assets	2,780,600,000
Current Cash	126,300,000
Current Liabilities	1,486,500,000
Current Debt	700,000
Non-Cash Working Capital (NCWC)	1,168,500,000
Change in NCWC	17,600,000
EBIT	734,700,000
Tax Provision	139,100,000
Depreciation and Amortization	260,900,000
Capital Expenditure	-134,300,000
Unlevered Free Cash Flow	739,800,000

Current Assets	2,894,100,000
Current Cash	110,400,000
Current Liabilities	1,639,500,000
Current Debt	6,700,000
Non-Cash Working Capital (NCWC)	1,150,900,000
Change in NCWC	-208,400,000
EBIT	853,100,000
Tax Provision	177,300,000
Depreciation and Amortization	252,700,000
Capital Expenditure	-129,600,000
Unlevered Free Cash Flow	574,946,971

Current Assets	3,232,100,000
Current Cash	265,100,000
Current Liabilities	1,610,200,000
Current Debt	2,500,000
Non-Cash Working Capital (NCWC)	1,359,300,000
Change in NCWC	-104,902,000
EBIT	786,800,000
Tax Provision	183,800,000
Depreciation and Amortization	286,100,000
Capital Expenditure	-170,000,000
Unlevered Free Cash Flow	598,915,070

Current Assets	3,260,368,000
Current Cash	261,341,000
Current Liabilities	1,537,921,000
Current Debt	3,096,000
Non-Cash Working Capital (NCWC)	1,464,202,000
Change in NCWC	913,423,000
EBIT	19,755,000
Tax Provision	-79,353,000
Depreciation and Amortization	163,792,000
Capital Expenditure	-94,532,000
Unlevered Free Cash Flow	1,002,438,000

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