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Discounted Cash Flow (DCF) Analysis Unlevered


Fifth Third Bancorp

Fifth Third Bancorp (FITB)

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 6,559.005,737.166,139.915,967.996,761.136,692.856,745.726,799.016,852.726,906.866,961.42
Revenue (%)
EBITDA 3,114.872,440.012,812.082,664.713,319.723,124.893,086.843,111.233,135.813,160.583,185.55
EBITDA (%)
EBIT 2,607.862,025.792,371.232,211.742,978.962,764.812,649.722,670.652,691.752,713.012,734.45
EBIT (%)
Depreciation 507.01414.22440.85452.97340.76360.08437.12440.58444.06447.56451.10
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 --2,540.082,391.972,513.792,681.152,676.032,697.172,718.482,739.952,761.60
Total Cash (%)
Account Receivables -----------
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable -----------
Accounts Payable (%)
Capital Expenditure -447.32-258.17-211.83-229.77-190.66-76.97-213.16-214.85-216.55-218.26-219.98
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 25.55
Diluted Shares Outstanding 685.49
Cost of Debt
Tax Rate 20.69
After-tax Cost of Debt -0.98
Risk-Free Rate
Market Risk Premium
Cost of Equity 13.05
Total Debt 11,326.00
Total Equity 17,514.23
Total Capital 28,840.23
Debt Weighting 39.27
Equity Weighting 60.73
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 6,559.005,737.166,139.915,967.996,761.136,692.856,745.726,799.016,852.726,906.866,961.42
EBITDA 3,114.872,440.012,812.082,664.713,319.723,124.893,086.843,111.233,135.813,160.583,185.55
EBIT 2,607.862,025.792,371.232,211.742,978.962,764.812,649.722,670.652,691.752,713.012,734.45
Tax Rate 29.60%26.90%27.79%30.06%26.82%20.69%26.98%26.98%26.98%26.98%26.98%
EBIAT 1,835.901,480.851,712.171,546.822,179.972,192.851,934.881,950.171,965.571,981.101,996.75
Depreciation 507.01414.22440.85452.97340.76360.08437.12440.58444.06447.56451.10
Accounts Receivable -----------
Inventories -----------
Accounts Payable -----------
Capital Expenditure --189.15-46.3517.94-39.10-113.70136.201.681.701.711.72
UFCF 2,342.911,705.922,106.672,017.732,481.632,439.232,508.202,392.432,411.332,430.382,449.58
WACC
PV UFCF 2,290.801,995.671,837.101,691.121,556.75
SUM PV UFCF 15,004.28

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.49
Free cash flow (t + 1) 2,547.56
Terminal Value 46,403.63
Present Value of Terminal Value 29,490.33

Intrinsic Value

Enterprise Value 44,494.62
Net Debt 8,644.85
Equity Value 35,849.77
Shares Outstanding 685.49
Equity Value Per Share 52.30

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
11.49 (%) 30.08 Buy 32.30 Buy 34.99 Buy 38.32 Buy 42.53 Buy 48.03 Buy 55.54 Buy 66.40 Buy 83.49 Buy
10.99 (%) 28.76 Buy 30.75 Buy 33.15 Buy 36.07 Buy 39.73 Buy 44.43 Buy 50.71 Buy 59.50 Buy 72.70 Buy
10.49 (%) 27.55 Buy 29.35 Buy 31.49 Buy 34.08 Buy 37.28 Buy 41.34 Buy 46.65 Buy 53.88 Buy 64.35 Buy
9.99 (%) 26.45 Buy 28.08 Buy 30.00 Buy 32.30 Buy 35.12 Buy 38.65 Buy 43.18 Buy 49.23 Buy 57.70 Buy
9.49 (%) 25.44 Sell 26.91 Buy 28.65 Buy 30.71 Buy 33.21 Buy 36.29 Buy 40.20 Buy 45.32 Buy 52.30 Buy
8.99 (%) 24.51 Sell 25.85 Buy 27.42 Buy 29.27 Buy 31.50 Buy 34.22 Buy 37.62 Buy 41.99 Buy 47.82 Buy
8.49 (%) 23.65 Sell 24.88 Sell 26.30 Buy 27.98 Buy 29.96 Buy 32.37 Buy 35.35 Buy 39.12 Buy 44.05 Buy
7.99 (%) 22.86 Sell 23.99 Sell 25.28 Sell 26.80 Buy 28.58 Buy 30.73 Buy 33.35 Buy 36.63 Buy 40.84 Buy
7.49 (%) 22.13 Sell 23.16 Sell 24.35 Sell 25.72 Buy 27.33 Buy 29.25 Buy 31.57 Buy 34.44 Buy 38.08 Buy