Complete ELAN Stock Valuation Analysis
Comprehensive intrinsic value analysis using 5 different methodologies
ELAN DCF Analysis
ELAN (Elanco Animal Health Incorporated) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $4.4B | $4.4B | $4.4B | $4.6B | $4.7B | $4.8B | $5.0B | $5.1B |
| Revenue Growth % | - | -0.0% | 0.5% | 3.3% | 3.0% | 2.7% | 2.4% | 2.2% |
| EBIT | $358.0M | $326.0M | $251.0M | $323.1M | $337.4M | $351.2M | $364.6M | $377.6M |
| EBIT Margin % | 8.1% | 7.4% | 5.7% | 7.0% | 7.1% | 7.2% | 7.3% | 7.4% |
| Tax Rate % | 25.0% | 25.0% | 30.7% | 26.1% | 26.0% | 25.9% | 25.8% | 25.7% |
| NOPAT | $268.5M | $244.5M | $173.8M | $238.6M | $249.5M | $260.2M | $270.5M | $280.6M |
| NOPAT Margin % | 6.1% | 5.5% | 3.9% | 5.2% | 5.3% | 5.4% | 5.5% | 5.5% |
| Capex | $184.0M | $154.0M | $147.0M | $225.5M | $220.6M | $215.2M | $209.3M | $203.2M |
| Capex / Revenue % | 4.2% | 3.5% | 3.3% | 4.9% | 4.7% | 4.4% | 4.2% | 4.0% |
| Depreciation | $682.0M | $694.0M | $662.0M | $704.0M | $724.9M | $744.2M | $762.1M | $778.5M |
| D&A / Revenue % | 15.4% | 15.7% | 14.9% | 15.4% | 15.4% | 15.4% | 15.4% | 15.4% |
| Change in NWC | $-56.0M | $589.0M | $-266.0M | $-12.8M | $-10.5M | $-8.6M | $-7.1M | $-5.8M |
| NWC Change / Revenue % | -1.3% | 13.3% | -6.0% | -0.3% | -0.2% | -0.2% | -0.1% | -0.1% |
| Unlevered FCF | $822.5M | $195.5M | $954.8M | $729.8M | $764.3M | $797.9M | $830.4M | $861.7M |
| UFCF % Chg. | - | -76.2% | 388.4% | -23.6% | 4.7% | 4.4% | 4.1% | 3.8% |
| FCF / Revenue % | 18.6% | 4.4% | 21.5% | 15.9% | 16.2% | 16.5% | 16.7% | 17.0% |
| Discount Factor | - | - | - | 0.919 | 0.845 | 0.777 | 0.715 | 0.657 |
| Present Value of FCF | - | - | - | $671.1M | $646.2M | $620.2M | $593.5M | $566.4M |
| Sum of PV of UFCF | - | - | - | $671.1M | $1.3B | $1.9B | $2.5B | $3.1B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 5.9% |
| Tax Rate | 26.1% |
| After Tax Cost of Debt | 4.3% |
| Risk Free Rate | 4.37% |
| Market Risk Premium | 4.3% |
| Beta | 1.68 |
| Cost of Equity | 11.6% |
| Total Debt | $4.3B |
| Market Cap | $6.6B |
| Total Capital | $11.0B |
| Debt Weighting | 39.4% |
| Equity Weighting | 60.6% |
| WACC | 8.8% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $861.7M |
| Terminal Value | $14.1B |
| PV of Terminal Value | $9.3B |
| Cumulative PV of UFCF | $3.1B |
| Net Debt | $3.9B |
| Equity Value | $8.5B |
| Shares Outstanding | 497.3M |
| Implied Share Price | $17 |
| Current Share Price | $13 |
| Implied Upside/(Downside) | +28.2% |
Valuation Summary
$17.14
Implied Price
$13.37
Current Price
+28.2%
Upside/Downside
8.8%
WACC
ELAN Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 9 peer companies in Healthcare
P/E Ratio
$14.76
+10.4%
Peer Median: 19.7x
EV/EBITDA
$14.74
+10.3%
Peer Median: 11.7x
P/S Ratio
$32.76
+145.1%
Peer Median: 3.7x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for ELAN's business model and current situation.
Multiple Comparison
| Multiple | ELAN Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | 17.9x | 19.7x | 30.4x | -9.4% | Fair Value |
| EV/EBITDA | 16.8x | 11.7x | 16.6x | 43.3% | Overvalued |
| P/S Ratio | 1.5x | 3.7x | 6.0x | -59.2% | Undervalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $18.90B | 17.8x | 11.0x | 8.3x | |
| $9.94B | 0.0x | 14.2x | 0.7x | |
| $7.32B | 62.3x | 64.7x | 10.7x | |
| $6.64B | 17.9x | 16.8x | 1.5x | |
| $5.46B | 0.0x | 0.0x | 12.6x | |
| $4.18B | 19.7x | 11.7x | 3.7x | |
| $3.32B | 0.0x | 10.3x | 1.2x | |
| $2.38B | 3.2x | 7.1x | 0.4x | |
| $722.17B | 61.8x | 45.1x | 14.7x |
ELAN Graham Number
Benjamin Graham's conservative valuation formula for defensive investors
Input Data
| EPS (TTM) | $0.75 | Latest 10-K |
| Book Value per Share | $12.26 | Latest 10-K Balance Sheet |
| Graham Constant | 22.5 | Benjamin Graham's formula |
Graham Number Result
$14.36
Intrinsic Value
$13.37
Current Price
+7.4%
Upside/Downside
Confidence: High
Conservative value investing approach
Calculation Breakdown
Formula:
√(22.5 × EPS × BVPS)
Step 1: Multiply constant by EPS
22.5 × 0.75 = 16.82
Step 2: Multiply by Book Value per Share
16.82 × 12.26 = 206.12
Step 3: Take square root
√206.12 = 14.36
Graham Number Result:
$14.36
ELAN Graham Intrinsic Value
Growth-adjusted intrinsic value with two formula variants
Formula Selection
V = EPS × (8.5 + 2g)
Graham's original P/E shortcut for growth, no interest-rate adjustment
V = [EPS × (8.5 + 2g) × 4.4] / Y
Graham's 1974 refinement: adds rate-environment sensitivity
Active Formula: Base-Growth
0.75 × (8.5 + 2 × 30.5%)
Input Data & Growth Assumptions
Current EPS (TTM)$0.75
Latest 10-K • 2024-12-31T00:00:00
Historical 5Y30.5%
Financial statements
Custom
%
Enter a positive growth rate estimate (0-50%)
Graham Intrinsic Value Result
$51.87
Intrinsic Value
$13.37
Current Price
+288.1%
Upside/Downside
Base Formula
Growth: 30.5%
ELAN Peter Lynch Fair Value
Growth-based valuation using PEG ratio analysis for growth stocks
Fair Value Calculation
EPS (TTM)$0.75
Latest 10-K • 2024-12-31T00:00:00
Historical 5Y30.5%
5-year earnings growth
30.5%
1%50%
Fair Value Formula: EPS × Growth Rate
$0.75 × 30.5% = $22.76
$22.76
Fair Value
$13.37
Current Price
+70.3%
Upside/Downside
PEG Analysis
17.9x
Current P/E
30.5%
Growth Rate
0.59
PEG Ratio (P/E ÷ Growth Rate)
Undervalued
PEG Ratio Interpretation:
• PEG < 1.0: Undervalued (growth exceeds P/E)
• PEG = 1.0: Fairly valued (ideal Lynch ratio)
• PEG > 1.5: Overvalued (paying premium for growth)
Peter Lynch's Rule:
"The P/E ratio of any company that's fairly priced will equal its growth rate." A stock with 15% growth should trade at a P/E of 15 (PEG = 1.0).