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Rockwell Automation Inc (NYSE:ROK)
Intrinsic Value: Projected FCF
$86.57 (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, Rockwell Automation Inc's projected FCF intrinsic value is $86.57. The stock price of Rockwell Automation Inc is $106.26. Therefore, Rockwell Automation Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 1.2.

ROK' s 10-Year Price to Intrinsic Value: Projected FCF Range
Min: 0.32   Max: 9.59
Current: 1.23

0.32
9.59

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Rockwell Automation Inc was 9.59. The lowest was 0.32. And the median was 1.53.

ROK's Price to Intrinsic Value: Projected FCF is ranked lower than
54% of the 869 Companies
in the Global Diversified Industrials industry.

( Industry Median: 1.17 vs. ROK: 1.23 )

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 Rockwell Automation Inc's FCF(6 year avg) is calculate as

Rockwell Automation Inc Quarterly Data

201303201306201309201312201403201406201409201412201503201506
total_freecashflow 169262292168180263281228267261
201009201012201103201106201109201112201203201206201209201212
total_freecashflow 16-8202192137-221223232345146
200909200912201003201006
total_freecashflow 87106161112

Add all the Free Cash Flow together and divide 6 will get Rockwell Automation Inc's FCF(6 year avg) = $683.67.

Rockwell Automation Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jun15)*0.8)/Shares Outstanding
=(14.1665463093*683.666666667+2556*0.8)/135.500
=86.57

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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.

Rockwell Automation Inc'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
=106.26/86.5682324243
=1.23

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Rockwell Automation Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Projected FCF 13.5630.8743.8551.7950.8242.5739.5345.7962.5281.10

Rockwell Automation Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Projected FCF 47.7953.4562.5267.2873.2279.5081.1085.4588.1186.57
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