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Discounted Cash Flow (DCF) Analysis Unlevered


Caesars Entertainment Corporation

Caesars Entertainment Corporation (CZR)

Consumer Cyclical

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 8,220.007,966.823,929.243,877.374,868.438,391.719,110.889,891.6810,739.4011,659.7612,659.01
Revenue (%)
EBITDA -1,491.11-58.956,959.86-1,683.94-963.952,672.762,642.152,868.593,114.433,381.333,671.11
EBITDA (%)
EBIT -2,212.82-709.846,585.80-2,122.86-1,590.031,528.131,630.851,770.611,922.352,087.102,265.96
EBIT (%)
Depreciation 721.72650.89374.06438.92626.081,144.631,011.311,097.981,192.071,294.231,405.15
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 3,195.942,990.751,394.094,657.892,708.791,657.364,893.455,312.825,768.136,262.466,799.15
Total Cash (%)
Account Receivables 619.79517.84168.17290.03504.86463.22622.27675.60733.50796.36864.61
Account Receivables (%)
Inventories 45.2143.0220.8220.1638.9541.1252.8457.3762.2967.6373.42
Inventories (%)
Accounts Payable 832.691,085.08308.05214.81317.91398.61697.89757.70822.64893.14969.68
Accounts Payable (%)
Capital Expenditure -725.83-991.07-341.06-219.85-597.84-564.76-834.56-906.08-983.73-1,068.03-1,159.56
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 11.53
Diluted Shares Outstanding 841.00
Cost of Debt
Tax Rate -66.48
After-tax Cost of Debt 3.37
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.03
Total Debt 18,858.00
Total Equity 9,696.73
Total Capital 28,554.73
Debt Weighting 66.04
Equity Weighting 33.96
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 8,220.007,966.823,929.243,877.374,868.438,391.719,110.889,891.6810,739.4011,659.7612,659.01
EBITDA -1,491.11-58.956,959.86-1,683.94-963.952,672.762,642.152,868.593,114.433,381.333,671.11
EBIT -2,212.82-709.846,585.80-2,122.86-1,590.031,528.131,630.851,770.611,922.352,087.102,265.96
Tax Rate 33.98%17.64%-1.80%-12.01%84.43%-66.48%9.29%9.29%9.29%9.29%9.29%
EBIAT -1,461.01-584.646,704.06-2,377.89-247.622,544.081,479.321,606.101,743.741,893.182,055.42
Depreciation 721.72650.89374.06438.92626.081,144.631,011.311,097.981,192.071,294.231,405.15
Accounts Receivable -101.94349.67-121.86-214.8341.63-159.05-53.33-57.90-62.86-68.25
Inventories -2.1922.200.66-18.79-2.17-11.72-4.53-4.92-5.34-5.80
Accounts Payable -252.40-777.03-93.25103.1080.70299.2959.8164.9470.5076.54
Capital Expenditure -265.25-650.02-121.21378.00-33.08269.7971.5277.6584.3191.53
UFCF -739.29688.036,022.94-2,274.62625.943,775.792,888.932,777.553,015.583,274.023,554.60
WACC
PV UFCF 2,636.372,313.122,291.802,270.682,249.75
SUM PV UFCF 12,268.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.58
Free cash flow (t + 1) 3,696.79
Terminal Value 66,250.66
Present Value of Terminal Value 41,930.86

Intrinsic Value

Enterprise Value 54,199.32
Net Debt 17,200.64
Equity Value 36,998.68
Shares Outstanding 841.00
Equity Value Per Share 43.99

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
11.58 (%) 18.45 Buy 21.03 Buy 24.14 Buy 27.98 Buy 32.83 Buy 39.16 Buy 47.75 Buy 60.10 Buy 79.34 Buy
11.08 (%) 16.91 Buy 19.23 Buy 22.00 Buy 25.38 Buy 29.61 Buy 35.02 Buy 42.22 Buy 52.24 Buy 67.19 Buy
10.58 (%) 15.51 Buy 17.59 Buy 20.08 Buy 23.08 Buy 26.78 Buy 31.45 Buy 37.55 Buy 45.83 Buy 57.73 Buy
10.08 (%) 14.22 Buy 16.11 Buy 18.34 Buy 21.02 Buy 24.28 Buy 28.35 Buy 33.57 Buy 40.50 Buy 50.17 Buy
9.58 (%) 13.05 Buy 14.76 Buy 16.77 Buy 19.17 Buy 22.06 Buy 25.63 Buy 30.13 Buy 36.01 Buy 43.99 Buy
9.08 (%) 11.96 Buy 13.53 Buy 15.35 Buy 17.50 Buy 20.08 Buy 23.22 Buy 27.15 Buy 32.18 Buy 38.86 Buy
8.58 (%) 10.97 Sell 12.39 Buy 14.05 Buy 15.99 Buy 18.30 Buy 21.09 Buy 24.52 Buy 28.87 Buy 34.54 Buy
8.08 (%) 10.05 Sell 11.35 Sell 12.86 Buy 14.62 Buy 16.69 Buy 19.18 Buy 22.21 Buy 26.00 Buy 30.85 Buy
7.58 (%) 9.19 Sell 10.39 Sell 11.77 Buy 13.37 Buy 15.24 Buy 17.46 Buy 20.15 Buy 23.47 Buy 27.66 Buy