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GuruFocus has detected 6 Warning Signs with Pentair PLC \$PNR.
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Pentair PLC (NYSE:PNR)
Intrinsic Value: Projected FCF
USD 45.97 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Pentair PLC's projected FCF intrinsic value is USD 45.97. The stock price of Pentair PLC is USD 64.97. Therefore, Pentair PLC's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Pentair PLC was 4.47. The lowest was 0.00. And the median was 1.21.

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding

Here Pentair PLC's FCF(6 year avg) is calculate as

Pentair PLC Quarterly Data

 201412 201503 201506 201509 201512 201603 201606 201609 201612 201703 total_freecashflow 288 -168 287 177 310 -48 343 167 281 -130 201206 201209 201212 201303 201306 201309 201312 201403 201406 201409 total_freecashflow 219 62 -224 -30 328 205 242 -27 382 236 201106 201109 201112 201203 total_freecashflow 179 70 59 -83

Add all the Free Cash Flow together and divide 6 will get Pentair PLC's FCF(6 year avg) = USD 520.81.

Pentair PLC's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Mar17) * 0.8) / Shares Outstanding = (9.52035159596 * 520.809 + 4374.8 * 0.8) / 184.000 = 45.97

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Pentair PLC's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

 Price to Intrinsic Value: Projected FCF = Share Price / Intrinsic Value: Projected FCF = 64.97 / 45.9680695345 = 1.41

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Pentair PLC Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Projected FCF 36.08 35.02 36.47 36.23 36.33 53.26 35.71 38.81 40.68 46.26

Pentair PLC Quarterly Data

 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Projected FCF 38.81 37.82 39.84 40.34 40.68 40.83 42.73 44.18 46.26 45.97
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