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Discounted Cash Flow (DCF) Analysis Unlevered


Bank of New York Mellon Corporation (The)

Bank of New York Mellon Corporation (The) (BK)

Financial Services

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 14,900.0015,692.6815,195.2215,237.7715,544.0516,392.7516,717.3317,048.3317,385.8917,730.1318,081.19
Revenue (%)
EBITDA 5,085.374,770.575,628.316,226.156,060.626,542.356,258.976,382.906,509.286,638.166,769.60
EBITDA (%)
EBIT 3,696.693,479.074,171.094,723.714,587.055,203.064,742.714,836.614,932.385,030.045,129.63
EBIT (%)
Depreciation 1,388.681,291.511,457.221,502.441,473.581,339.291,516.261,546.281,576.901,608.121,639.96
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash --263,234.43147,076.47210,609.41167,742.12212,132.88216,333.11220,616.51224,984.71229,439.41
Total Cash (%)
Account Receivables -----------
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 15,707.5821,180.4121,899.3520,986.9820,183.9519,730.3222,302.5922,744.1823,194.5223,653.7724,122.11
Accounts Payable (%)
Capital Expenditure -609.41-205.57-601.73-760.36-1,196.89-1,085.20-820.82-837.07-853.65-870.55-887.79
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 42.39
Diluted Shares Outstanding 1,007.14
Cost of Debt
Tax Rate 18.02
After-tax Cost of Debt -0.85
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.70
Total Debt 24,863.00
Total Equity 42,692.71
Total Capital 67,555.71
Debt Weighting 36.80
Equity Weighting 63.20
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 14,900.0015,692.6815,195.2215,237.7715,544.0516,392.7516,717.3317,048.3317,385.8917,730.1318,081.19
EBITDA 5,085.374,770.575,628.316,226.156,060.626,542.356,258.976,382.906,509.286,638.166,769.60
EBIT 3,696.693,479.074,171.094,723.714,587.055,203.064,742.714,836.614,932.385,030.045,129.63
Tax Rate 43.07%26.21%24.29%24.92%10.82%18.02%24.56%24.56%24.56%24.56%24.56%
EBIAT 2,104.392,567.053,158.073,546.784,090.944,265.233,578.133,648.983,721.233,794.913,870.05
Depreciation 1,388.681,291.511,457.221,502.441,473.581,339.291,516.261,546.281,576.901,608.121,639.96
Accounts Receivable -----------
Inventories -----------
Accounts Payable -5,472.83718.94-912.38-803.03-453.632,572.27441.59450.33459.25468.34
Capital Expenditure --403.84396.16158.63436.53-111.69-264.3816.2516.5716.9017.24
UFCF 3,493.078,927.555,730.394,295.485,198.015,039.207,402.295,653.115,765.045,879.195,995.59
WACC
PV UFCF 6,836.884,822.494,542.324,278.434,029.88
SUM PV UFCF 40,320.92

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.27
Free cash flow (t + 1) 6,235.42
Terminal Value 146,028.53
Present Value of Terminal Value 98,151.52

Intrinsic Value

Enterprise Value 138,472.44
Net Debt -142,879.12
Equity Value 281,351.57
Shares Outstanding 1,007.14
Equity Value Per Share 279.36

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
10.27 (%) 222.96 Buy 227.86 Buy 233.95 Buy 241.71 Buy 251.95 Buy 266.08 Buy 286.82 Buy 320.25 Buy 383.13 Buy
9.77 (%) 220.14 Buy 224.50 Buy 229.84 Buy 236.57 Buy 245.27 Buy 257.00 Buy 273.65 Buy 299.12 Buy 342.98 Buy
9.27 (%) 217.60 Buy 221.49 Buy 226.21 Buy 232.08 Buy 239.55 Buy 249.42 Buy 263.02 Buy 283.00 Buy 315.20 Buy
8.77 (%) 215.30 Buy 218.78 Buy 222.98 Buy 228.13 Buy 234.60 Buy 242.99 Buy 254.29 Buy 270.33 Buy 294.87 Buy
8.27 (%) 213.21 Buy 216.34 Buy 220.08 Buy 224.63 Buy 230.28 Buy 237.49 Buy 246.99 Buy 260.10 Buy 279.36 Buy
7.77 (%) 211.30 Buy 214.13 Buy 217.48 Buy 221.52 Buy 226.49 Buy 232.73 Buy 240.81 Buy 251.70 Buy 267.15 Buy
7.27 (%) 209.55 Buy 212.11 Buy 215.13 Buy 218.74 Buy 223.13 Buy 228.57 Buy 235.52 Buy 244.68 Buy 257.32 Buy
6.77 (%) 207.94 Buy 210.27 Buy 213.00 Buy 216.24 Buy 220.13 Buy 224.92 Buy 230.94 Buy 238.73 Buy 249.23 Buy
6.27 (%) 206.47 Buy 208.59 Buy 211.06 Buy 213.98 Buy 217.45 Buy 221.68 Buy 226.94 Buy 233.63 Buy 242.47 Buy