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Discounted Cash Flow (DCF) Analysis Unlevered


Citizens Financial Group Inc.

Citizens Financial Group Inc. (CFG)

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 4,211.004,659.894,521.964,885.985,385.815,801.606,192.636,610.017,055.527,531.078,038.66
Revenue (%)
EBITDA -3,063.921,653.801,726.942,035.012,384.842,643.212,541.452,712.752,895.593,090.753,299.07
EBITDA (%)
EBIT -3,467.761,267.961,255.751,520.031,897.962,154.131,963.062,095.372,236.602,387.352,548.25
EBIT (%)
Depreciation 403.83385.84471.19514.98486.88489.07578.39617.37658.99703.40750.81
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 --3,797.094,582.073,416.224,369.764,899.615,229.845,582.335,958.586,360.19
Total Cash (%)
Account Receivables 445.94---5.92-6.817.277.768.288.84
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable -----------
Accounts Payable (%)
Capital Expenditure -343.20-308.02-283.98-300.00-412.01-468.77-430.39-459.40-490.36-523.41-558.69
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 31.77
Diluted Shares Outstanding 480.43
Cost of Debt
Tax Rate 21.45
After-tax Cost of Debt -1.02
Risk-Free Rate
Market Risk Premium
Cost of Equity 13.81
Total Debt 14,433.00
Total Equity 15,263.28
Total Capital 29,696.28
Debt Weighting 48.60
Equity Weighting 51.40
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 4,211.004,659.894,521.964,885.985,385.815,801.606,192.636,610.017,055.527,531.078,038.66
EBITDA -3,063.921,653.801,726.942,035.012,384.842,643.212,541.452,712.752,895.593,090.753,299.07
EBIT -3,467.761,267.961,255.751,520.031,897.962,154.131,963.062,095.372,236.602,387.352,548.25
Tax Rate 1.21%31.78%33.68%32.17%13.70%21.45%22.33%22.33%22.33%22.33%22.33%
EBIAT -3,425.76864.97832.831,031.021,637.971,692.101,524.681,627.441,737.131,854.211,979.19
Depreciation 403.83385.84471.19514.98486.88489.07578.39617.37658.99703.40750.81
Accounts Receivable -445.94---5.92--0.46-0.49-0.52-0.56
Inventories -----------
Accounts Payable -----------
Capital Expenditure --35.18-24.0416.02112.0256.75-38.3829.0130.9633.0535.28
UFCF -3,021.931,661.581,279.981,562.022,236.862,243.862,064.692,273.372,426.592,590.142,764.72
WACC
PV UFCF 1,894.041,913.091,873.261,834.251,796.05
SUM PV UFCF 9,059.33

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.01
Free cash flow (t + 1) 2,875.31
Terminal Value 57,391.35
Present Value of Terminal Value 37,283.33

Intrinsic Value

Enterprise Value 46,342.66
Net Debt 10,063.24
Equity Value 36,279.42
Shares Outstanding 480.43
Equity Value Per Share 75.51

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
11.01 (%) 33.67 Buy 37.65 Buy 42.52 Buy 48.60 Buy 56.41 Buy 66.83 Buy 81.41 Buy 103.25 Buy 139.61 Buy
10.51 (%) 31.33 Sell 34.89 Buy 39.20 Buy 44.52 Buy 51.26 Buy 60.07 Buy 72.08 Buy 89.41 Buy 116.62 Buy
10.01 (%) 29.20 Sell 32.40 Buy 36.24 Buy 40.92 Buy 46.78 Buy 54.31 Buy 64.35 Buy 78.39 Buy 99.44 Buy
9.51 (%) 27.27 Sell 30.15 Sell 33.58 Buy 37.73 Buy 42.86 Buy 49.36 Buy 57.85 Buy 69.42 Buy 86.12 Buy
9.01 (%) 25.50 Sell 28.10 Sell 31.19 Sell 34.88 Buy 39.40 Buy 45.05 Buy 52.31 Buy 61.98 Buy 75.51 Buy
8.51 (%) 23.87 Sell 26.24 Sell 29.02 Sell 32.33 Buy 36.33 Buy 41.28 Buy 47.54 Buy 55.72 Buy 66.88 Buy
8.01 (%) 22.38 Sell 24.54 Sell 27.05 Sell 30.03 Sell 33.59 Buy 37.95 Buy 43.39 Buy 50.39 Buy 59.71 Buy
7.51 (%) 21.01 Sell 22.98 Sell 25.26 Sell 27.94 Sell 31.13 Sell 34.99 Buy 39.76 Buy 45.80 Buy 53.69 Buy
7.01 (%) 19.74 Sell 21.54 Sell 23.62 Sell 26.05 Sell 28.91 Sell 32.35 Buy 36.55 Buy 41.81 Buy 48.55 Buy