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Discounted Cash Flow (DCF) Analysis Unlevered


Johnson & Johnson

Johnson & Johnson (JNJ)

Healthcare

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 71,312.0074,328.5077,472.5980,749.6884,165.4087,725.5991,436.3895,304.1499,335.51103,537.40107,917.03
Revenue (%)
EBITDA 20,060.0724,989.2423,915.7924,927.4325,981.8627,080.8928,226.4129,420.3930,664.8731,962.0033,313.99
EBITDA (%)
EBIT 15,959.6321,094.4319,654.8020,486.1921,352.7622,255.9823,197.4124,178.6625,201.4226,267.4427,378.55
EBIT (%)
Depreciation 4,100.443,894.814,260.994,441.234,629.104,824.915,029.005,241.735,463.455,694.565,935.44
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 29,209.4033,091.0533,111.7934,512.4135,972.2937,493.9239,079.9140,732.9942,456.0044,251.8846,123.74
Total Cash (%)
Account Receivables 11,716.5610,985.7512,085.7212,596.9513,129.8013,685.1914,264.0814,867.4515,496.3416,151.8316,835.06
Account Receivables (%)
Inventories 7,879.988,183.578,545.238,906.699,283.449,676.1310,085.4310,512.0510,956.7111,420.1811,903.25
Inventories (%)
Accounts Payable 6,268.327,633.547,383.147,695.448,020.968,360.258,713.899,082.489,466.679,867.1110,284.49
Accounts Payable (%)
Capital Expenditure -3,594.12-3,716.42-3,889.12-4,053.63-4,225.10-4,403.82-4,590.11-4,784.27-4,986.64-5,197.58-5,417.44
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 131.63
Diluted Shares Outstanding 2,728.70
Cost of Debt
Tax Rate 15.01
After-tax Cost of Debt -0.70
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.78
Total Debt 27,684.00
Total Equity 359,178.78
Total Capital 386,862.78
Debt Weighting 7.16
Equity Weighting 92.84
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 71,312.0074,328.5077,472.5980,749.6884,165.4087,725.5991,436.3895,304.1499,335.51103,537.40107,917.03
EBITDA 20,060.0724,989.2423,915.7924,927.4325,981.8627,080.8928,226.4129,420.3930,664.8731,962.0033,313.99
EBIT 15,959.6321,094.4319,654.8020,486.1921,352.7622,255.9823,197.4124,178.6625,201.4226,267.4427,378.55
Tax Rate 10.60%20.62%31.72%19.73%92.64%15.01%31.72%31.72%31.72%31.72%31.72%
EBIAT 14,267.8316,744.8513,420.1316,444.661,570.6818,914.9315,839.0016,508.9917,207.3217,935.1918,693.84
Depreciation 4,100.443,894.814,260.994,441.234,629.104,824.915,029.005,241.735,463.455,694.565,935.44
Accounts Receivable -730.81-1,099.97-511.23-532.85-555.39-578.88-603.37-628.89-655.50-683.22
Inventories --303.59-361.66-361.46-376.75-392.69-409.30-426.61-444.66-463.47-483.07
Accounts Payable -1,365.21-250.40312.31325.52339.29353.64368.60384.19400.44417.38
Capital Expenditure -122.30172.70164.51171.47178.72186.28194.16202.37210.93219.86
UFCF 18,368.2722,554.3916,141.7920,490.025,787.1623,309.7620,419.7321,283.4922,183.7823,122.1524,100.22
WACC
PV UFCF 20,069.6923,692.006,222.9323,309.7618,989.8018,407.0217,842.1317,294.5716,763.81
SUM PV UFCF 141,765.10

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.53
Free cash flow (t + 1) 25,064.23
Terminal Value 710,034.87
Present Value of Terminal Value 493,891.38

Intrinsic Value

Enterprise Value 635,656.49
Net Debt -9,809.92
Equity Value 645,466.40
Shares Outstanding 2,728.70
Equity Value Per Share 236.55