The calculations below outline how an intrinsic value for STMicroelectronics N.V is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$258.93||$636.36||$636.00||$800.00||$757.82|
|Source||Analyst x9||Analyst x8||Analyst x1||Analyst x1||Extrapolated @ (-5.27%)|
Discounted (@ 9.2%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $758 × (1 + 2.5%) ÷ (9.2% – 2.5%)
Terminal value based on the Perpetuity Method where growth (g) = 2.5%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($9,746 / 856)
Value per share:
Current discount (share price of $15.44): -36%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 9.2% = 2.47% + (0.893 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.893 = 0.824 (1 + (1- 30%) (11.93%))
Levered Beta used in calculation = 0.893
If the companies market cap is in a different currency to that of the listing the equivilent number of shares outstanding must be calculated.
Market Cap (EUR): 12,164Exchange rate EUR/USD = 1.086
Market Cap (USD): $13,210
Equivilent shares outstanding: $13,210 / $15.44 = 856
Are STMicroelectronics N.V's annual earnings growth expected to exceed 3.6% over the next 3 years?
Mr. Carlo Bozotti has been the Chairman of Management Board, Chief Executive Officer and President at STMicroelectronics N.V., since March 18, 2005 and its Member of the Managing Board since February 2005. Mr. Bozotti served as a Corporate Vice President of Memory Products at STMicroelectronics N.V. since August, 1998 after served as Corporate Vice President of Europe and Headquarters Region from 1994 to 1998. He served as a Product Manager for the Industrial, Computer Peripheral and Telecom divisions and as Product Manager of the Monolithic Microsystems' Telecom business unit from 1986 to 1987. Mr. Bozotti served as a Director of Corporate Strategic Marketing and Key Accounts for the Headquarters Region in 1988 and became Vice President, Marketing and Sales, Americas Division at STMicroelectronics N.V. in 1991. He served as Vice Chairman and Director at ST-Ericsson NV. He joined SGS Microelettronica in 1977 after graduating in Electronic Engineering from the University of Pavia.
Average tenure of the STMicroelectronics N.V management team:
Average tenure of the STMicroelectronics N.V board of directors:
STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and markets semiconductor products, and subsystems and modules worldwide. The company offers a range of products, including discrete and standard commodity components, application-specific integrated circuits, full-custom devices and semi-custom devices, and application-specific standard products for analog, digital, and mixed-signal applications, as well as silicon chips and smartcards. It also provides subsystems and modules, including mobile phone accessories, battery chargers, and ISDN power supplies for the telecommunications, automotive, and industrial markets; and in-vehicle equipment for electronic toll payment. The company sells its products through its distributors and retailers, as well as through sales representatives. STMicroelectronics N.V. was founded in 1987 and is headquartered in Geneva, Switzerland.
|Market Cap:||€12,164 million|
39 Chemin du Champ des Filles, Geneva, 1228, Switzerland
|Sector:||Semiconductors and Semiconductor Equipment|