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Smith & Nephew plc – Surgical Appliance and Supplies Manufacturing
Smith & Nephew plc, also known as Smith+Nephew, is a British multinational medical equipment manufacturing company headquartered in Watford, England.
Analysis Results
Intrinsic Value $34.23
Latest Price $26.88
Relative Value 21% undervalued
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Cash Flow (Millions)
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 1.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.5%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 1.3%, 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 (million) Present value (million)
2022 726 681
2023 735 648
2024 745 616
2025 754 586
2026 764 557
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 17300 million. This corresponds to a present value of 11800 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3090 million. Adding in the terminal value gives a total present value of 14900 million.

There are presently 435.0 million outstanding shares, so the intrinsic value per share is 34.23.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,424,000,000
Current Cash 1,290,000,000
Current Liabilities 2,131,000,000
Current Debt 491,000,000
Non-Cash Working Capital (NCWC) 1,494,000,000
Change in NCWC -57,000,000
EBIT 602,000,000
Tax Provision 62,000,000
Depreciation and Amortization 567,000,000
Capital Expenditure -408,000,000
Unlevered Free Cash Flow 640,307,167
Current Assets 4,664,000,000
Current Cash 1,762,000,000
Current Liabilities 1,688,000,000
Current Debt 337,000,000
Non-Cash Working Capital (NCWC) 1,551,000,000
Change in NCWC 101,000,000
EBIT 309,000,000
Tax Provision -202,000,000
Depreciation and Amortization 562,000,000
Capital Expenditure -443,000,000
Unlevered Free Cash Flow 529,000,000
Current Assets 3,219,000,000
Current Cash 277,000,000
Current Liabilities 1,564,000,000
Current Debt 72,000,000
Non-Cash Working Capital (NCWC) 1,450,000,000
Change in NCWC 39,000,000
EBIT 816,000,000
Tax Provision 143,000,000
Depreciation and Amortization 502,000,000
Capital Expenditure -408,000,000
Unlevered Free Cash Flow 791,950,201
Current Assets 3,077,000,000
Current Cash 365,000,000
Current Liabilities 1,465,000,000
Current Debt 164,000,000
Non-Cash Working Capital (NCWC) 1,411,000,000
Change in NCWC 168,000,000
EBIT 852,000,000
Tax Provision 118,000,000
Depreciation and Amortization 435,000,000
Capital Expenditure -347,000,000
Unlevered Free Cash Flow 979,272,727
Current Assets 2,731,000,000
Current Cash 169,000,000
Current Liabilities 1,346,000,000
Current Debt 27,000,000
Non-Cash Working Capital (NCWC) 1,243,000,000
Change in NCWC 76,000,000
EBIT 940,000,000
Tax Provision 112,000,000
Depreciation and Amortization 447,000,000
Capital Expenditure -376,000,000
Unlevered Free Cash Flow 967,227,531
Current Assets 2,529,000,000
Current Cash 100,000,000
Current Liabilities 1,348,000,000
Current Debt 86,000,000
Non-Cash Working Capital (NCWC) 1,167,000,000
Change in NCWC 110,000,000
EBIT 798,000,000
Tax Provision 278,000,000
Depreciation and Amortization 463,000,000
Capital Expenditure -392,000,000
Unlevered Free Cash Flow 770,107,344
Current Assets 2,475,000,000
Current Cash 120,000,000
Current Liabilities 1,344,000,000
Current Debt 46,000,000
Non-Cash Working Capital (NCWC) 1,057,000,000
Change in NCWC -167,000,000
EBIT 612,000,000
Tax Provision 149,000,000
Depreciation and Amortization 493,000,000
Capital Expenditure -358,000,000
Unlevered Free Cash Flow 416,872,987
Current Assets 2,440,000,000
Current Cash 93,000,000
Current Liabilities 1,162,000,000
Current Debt 39,000,000
Non-Cash Working Capital (NCWC) 1,224,000,000
Change in NCWC 134,000,000
EBIT 747,000,000
Tax Provision 213,000,000
Depreciation and Amortization 427,000,000
Capital Expenditure -375,000,000
Unlevered Free Cash Flow 710,155,462
Current Assets 2,256,000,000
Current Cash 137,000,000
Current Liabilities 1,073,000,000
Current Debt 44,000,000
Non-Cash Working Capital (NCWC) 1,090,000,000
Change in NCWC 16,000,000
EBIT 809,000,000
Tax Provision 246,000,000
Depreciation and Amortization 361,000,000
Capital Expenditure -340,000,000
Unlevered Free Cash Flow 597,852,867
Current Assets 2,144,000,000
Current Cash 178,000,000
Current Liabilities 930,000,000
Current Debt 38,000,000
Non-Cash Working Capital (NCWC) 1,074,000,000
Change in NCWC -115,000,000
EBIT 850,000,000
Tax Provision 371,000,000
Depreciation and Amortization 312,000,000
Capital Expenditure -265,000,000
Unlevered Free Cash Flow 495,318,181

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