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Biogen Inc. (BIIB) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Biogen Inc. (BIIB)

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Intrinsic Value (DCF)

Current$168.57
→
Intrinsic$283.93
+68%
$185.08$283.93$471.85
Market implies 1% growth for 5 years
DCF analysis suggests BIIB could have 68% upside at 8% growth — verify assumptions match your view.
At $169, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $185 → Bull $472. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$342$376$412$451
10%$236$259$284$311
12%$176$194$213$233
14%$139$153$168$183

Bull Case

  • Bull case ($472) offers 180% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($185) with 6% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$2.72B
Year 2$2.93B
Year 3$3.17B
Year 4$3.42B
Year 5$3.70B
Terminal$54.39B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.52BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is BIIB stock undervalued or overvalued?
🟢 UNDERVALUED

BIIB trades at $168.57 vs. our DCF-derived intrinsic value of $283.93, implying +55% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of BIIB's future cash flows. The bear case ($197.64) still suggests upside, providing margin of safety.

What is BIIB's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.52B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.26B net debt and dividing by 0.15B shares: Bear $197.64 | Base $283.93 | Bull $399.32. Current price $168.57 implies +55% to base case.

How is BIIB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($45.68B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.