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Discounted Cash Flow (DCF) Analysis Unlevered


Itau Unibanco Banco Holding SA American Depositary Shares (Each repstg 500 Preferred shares)

Itau Unibanco Banco Holding SA American Depositary Shares (Each repstg 500 Preferred shares) (ITUB)

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 27,326.1328,484.7617,902.6728,891.3327,351.4224,233.3624,802.8525,385.7125,982.2826,592.8627,217.79
Revenue (%)
EBITDA 11,621.8013,558.756,606.0914,295.4312,308.1410,325.8410,992.6211,250.9511,515.3511,785.9612,062.93
EBITDA (%)
EBIT 10,632.6012,604.515,889.9813,298.6811,350.849,407.3910,094.7610,331.9910,574.7910,823.2911,077.64
EBIT (%)
Depreciation 989.21954.24716.11996.75957.30918.44897.86918.96940.56962.66985.28
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 --71,080.7784,310.6983,916.9188,013.1584,260.2386,240.3488,266.9990,341.2792,464.29
Total Cash (%)
Account Receivables ---2,114.85--1,815.571,858.231,901.901,946.601,992.34
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable ---101,220.78--86,896.7788,938.8591,028.9193,168.0995,357.54
Accounts Payable (%)
Capital Expenditure -1,464.68-344.67-386.70-418.92-224.28-336.84-349.72-357.94-366.35-374.96-383.77
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 8.59
Diluted Shares Outstanding 1,277.91
Cost of Debt
Tax Rate 31.75
After-tax Cost of Debt -1.54
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.55
Total Debt 53,026.38
Total Equity 10,977.25
Total Capital 64,003.63
Debt Weighting 82.85
Equity Weighting 17.15
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 27,326.1328,484.7617,902.6728,891.3327,351.4224,233.3624,802.8525,385.7125,982.2826,592.8627,217.79
EBITDA 11,621.8013,558.756,606.0914,295.4312,308.1410,325.8410,992.6211,250.9511,515.3511,785.9612,062.93
EBIT 10,632.6012,604.515,889.9813,298.6811,350.849,407.3910,094.7610,331.9910,574.7910,823.2911,077.64
Tax Rate 34.59%35.78%-10.69%50.05%38.29%31.75%29.96%29.96%29.96%29.96%29.96%
EBIAT 6,955.158,094.456,519.666,642.127,005.146,420.337,070.217,236.377,406.427,580.477,758.61
Depreciation 989.21954.24716.11996.75957.30918.44897.86918.96940.56962.66985.28
Accounts Receivable ----2,114.85---42.67-43.67-44.69-45.75
Inventories -----------
Accounts Payable -----101,220.78--2,042.072,090.062,139.182,189.45
Capital Expenditure --1,120.0242.0332.23-194.64112.5612.888.228.418.618.81
UFCF 7,944.357,928.677,277.797,671.10-91,338.147,451.347,980.9510,162.9510,401.7810,646.2310,896.41
WACC
PV UFCF 7,627.069,281.649,078.518,879.838,685.50
SUM PV UFCF -6,369.62

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.64
Free cash flow (t + 1) 11,332.27
Terminal Value 1,770,666.98
Present Value of Terminal Value 1,411,393.89

Intrinsic Value

Enterprise Value 1,405,024.27
Net Debt -34,986.76
Equity Value 1,440,011.03
Shares Outstanding 1,277.91
Equity Value Per Share 1,126.85

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
6.64 (%) 130.61 Buy 151.13 Buy 180.49 Buy 225.97 Buy 305.92 Buy 483.37 Buy 1,215.34 Buy -2,119.19 Sell -550.00 Sell
6.14 (%) 120.62 Buy 137.81 Buy 161.68 Buy 197.09 Buy 255.05 Buy 367.18 Buy 676.04 Buy 5,397.13 Buy -861.06 Sell
5.64 (%) 112.00 Buy 126.57 Buy 146.30 Buy 174.54 Buy 218.30 Buy 295.21 Buy 465.90 Buy 1,170.03 Buy -2,037.65 Sell
5.14 (%) 104.49 Buy 116.97 Buy 133.50 Buy 156.47 Buy 190.54 Buy 246.31 Buy 354.20 Buy 651.36 Buy 5,193.71 Buy
4.64 (%) 97.91 Buy 108.69 Buy 122.71 Buy 141.70 Buy 168.87 Buy 210.98 Buy 284.99 Buy 449.26 Buy 1,126.85 Buy
4.14 (%) 92.10 Buy 101.48 Buy 113.48 Buy 129.40 Buy 151.51 Buy 184.30 Buy 237.98 Buy 341.82 Buy 627.83 Buy
3.64 (%) 86.93 Buy 95.15 Buy 105.53 Buy 119.02 Buy 137.30 Buy 163.47 Buy 204.00 Buy 275.25 Buy 433.38 Buy
3.14 (%) 82.32 Buy 89.57 Buy 98.60 Buy 110.16 Buy 125.48 Buy 146.77 Buy 178.34 Buy 230.03 Buy 330.01 Buy
2.64 (%) 78.18 Buy 84.61 Buy 92.52 Buy 102.51 Buy 115.51 Buy 133.11 Buy 158.31 Buy 197.35 Buy 265.96 Buy