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Intrinsic Value Calculator (Discounted Earnings Per Share Method 10 Years)

The document calculates the intrinsic value of American International Group (AIG) stock using a discounted earnings per share valuation method. It projects AIG's earnings per share over the next 10 years based on a 14% annual growth rate from the current EPS of $4.26. It discounts these projected EPS figures using a 4% discount rate to calculate a discounted value for each year. Summing the discounted values results in an intrinsic value of $73.06 for AIG stock. A chart displays the projected and discounted EPS over the 10-year period.

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Martin Rodriguez
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122 views6 pages

Intrinsic Value Calculator (Discounted Earnings Per Share Method 10 Years)

The document calculates the intrinsic value of American International Group (AIG) stock using a discounted earnings per share valuation method. It projects AIG's earnings per share over the next 10 years based on a 14% annual growth rate from the current EPS of $4.26. It discounts these projected EPS figures using a 4% discount rate to calculate a discounted value for each year. Summing the discounted values results in an intrinsic value of $73.06 for AIG stock. A chart displays the projected and discounted EPS over the 10-year period.

Uploaded by

Martin Rodriguez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Intrinsic Value Calculator (Discounted Earnings Per Share Method 10 years

(Be consistent with the denominations used. Usually Millions $)

KEY IN THE VALUES IN WHITE BOX

Name of Stock American International Group Intrinsic Value: $73,06


Stock Symbol AIG

Current EPS $4.26 Current Year 2006 NB: Take the last Fiscal Year as the Current Y

EPS Growth Rate 14% Discount Rate 4% NB: Use the 3 months US Treasury Rate

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015
EPS (Projected) $4,86 $5,54 $6,31 $7,19 $8,20 $9,35 $10,66 $12,15 $13,85
Discount Factor 0,96 0,92 0,89 0,85 0,82 0,79 0,76 0,73 0,70
Discounted Value $4,67 $5,12 $5,61 $6,15 $6,74 $7,39 $8,10 $8,88 $9,73

Note: This assumes EPS growth rate remains constant throughout the 10 years
In certain cases, you may want to lower or increase the growth rate after a few years.

Intrinsic Value Calculator


(Discounted Earnings Per Share Method 10 years)
$18.00
$16.00 EPS(Projected)
Value

$14.00 Discounted Value


$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Year
ted Earnings Per Share Method 10 years)
nominations used. Usually Millions $)

NB: Take the last Fiscal Year as the Current Year

NB: Use the 3 months US Treasury Rate

0 2011 2012 2013 2014 2015 2016


19 $8,20 $9,35 $10,66 $12,15 $13,85 $15,79
5 0,82 0,79 0,76 0,73 0,70 0,68
15 $6,74 $7,39 $8,10 $8,88 $9,73 $10,67

ator
Per Share Method 10 years)

2012 2013 2014 2015 2016


Year
Intrinsic Value Calculator (Discounted Cash Flow Method 10 years)
(Be consistent with the denominations used. Usually Millions $)

KEY IN THE VALUES IN WHITE BOX

Name of Stock Adobe


PV of 10 yr Cash flows $108.778 mil
Stock Symbol ADBE
Intrinsic Value per share $228,05
Operating Cash Flow (current) $5,840.00 millions

Cash flow growth rate 18.28% Current Year 2021 NB: Take the last Fiscal Year as t

No. of Shares Outstanding 477.0 millions Discount Rate 7% NB: Use the 3 months US Treasu

Year 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Cash Flow (Projected) $6.907,55 $8.170,25 $9.663,77 $11.430,31 $13.519,77 $15.991,19 $18.914,38 $22.371,93 $26.461,51 $31.298,68
Discount Factor 0,94 0,88 0,83 0,78 0,73 0,69 0,64 0,60 0,57 0,53
Discounted Value $6.485,96 $7.203,38 $8.000,15 $8.885,05 $9.867,82 $10.959,31 $12.171,52 $13.517,82 $15.013,03 $16.673,62

Note: This assumes EPS growth rate remains constant throughout the 10 years
In certain cases, you may want to lower or increase the growth rate after a few years.

Intrinsic Value Calculator


(Discounted Cash Flow Method 10 years)
$35,000
Value

$30,000 Cash Flow(Projected)


$25,000 Discounted Value
$20,000
$15,000
$10,000
$5,000
$0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Year
counted Cash Flow Method 10 years)
enominations used. Usually Millions $)

PV of 10 yr Cash flows $108.778 million


Intrinsic Value per share $228,05

NB: Take the last Fiscal Year as the Current Year

NB: Use the 3 months US Treasury Rate

26 2027 2028 2029 2030 2031


19,77 $15.991,19 $18.914,38 $22.371,93 $26.461,51 $31.298,68
73 0,69 0,64 0,60 0,57 0,53
67,82 $10.959,31 $12.171,52 $13.517,82 $15.013,03 $16.673,62

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