Walgreens Boots Alliance

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
BB&T Capitial Markets	Andrew P. Wolf	awolf@bbandtcm.com
Mizuho Securities USA	Ann Hynes	ann.hynes@us.mizuho-sc.com
Cowen & Company	Charles Rhyee	charles.rhyee@cowen.com
Leerink Partners	David Larsen	david.larsen@leerink.com
SunTrust Robinson Humphrey	David S. MacDonald	david.macdonald@suntrust.com
Deutsche Bank Research	George Hill	george.hill@db.com
Guggenheim Securities	John Heinbockel	john.heinbockel@guggenheimpartners.com
Raymond James	John W. Ransom	john.ransom@raymondjames.com
Jefferies	Mark Wiltamuth	mwiltamuth@jefferies.com
Scotiabank GBM	Patricia A. Baker	patricia.baker@scotiabank.com
Credit Suisse	Robert M. Willoughby	robert.willoughby@credit-suisse.com
Atlantic Equities	Sam Hudson	s.hudson@atlantic-equities.com
Wolfe Research	Scott Mushkin	smushkin@wolferesearch.com
FBR Capital Markets	Steven Halper	shalper@fbr.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	3,466	3,732	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	4,455	6,464	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	120	127	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	51,228	54,398	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	6.77%	6.86%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	8,962	4,915	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	258.60%	131.69%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	18.23%	12.25%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.63%	7.09%
Enterprise value	EV_Market	100,800	98,244	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	94,082	98,864
Long-Run Growth	g = IR x ROIC	17.49%	9.04%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	4.67%	4.93%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	25.06%	23.31%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	0.88	0.84	30.08%	18.94%	23.30%	15.14%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	14.17	13.12	30.08%	18.94%	23.30%	15.14%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	29.09	26.32	30.08%	18.94%	23.30%	15.14%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	22.63	15.20	30.08%	18.94%	23.30%	15.14%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	18.91	17.11	30.08%	18.94%	23.30%	15.14%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.97	1.81	30.08%	18.94%	23.30%	15.14%

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