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Discounted Cash Flow (DCF) Analysis Unlevered


Lowe's Companies Inc.

Lowe's Companies Inc. (LOW)

Consumer Cyclical

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 50,521.0053,415.8556,220.1959,070.5565,013.0568,614.7771,304.4775,532.8280,011.9284,756.6389,782.69
Revenue (%)
EBITDA 5,183.455,710.156,375.376,556.837,437.497,664.275,625.927,976.278,449.268,950.309,481.05
EBITDA (%)
EBIT 3,561.734,150.414,789.964,967.835,844.676,127.304,021.575,967.096,320.946,695.777,092.83
EBIT (%)
Depreciation 1,621.721,559.741,585.411,589.001,592.821,536.971,604.352,009.172,128.322,254.532,388.22
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 666.88576.89590.31714.75656.63693.01727.31830.86880.13932.32987.61
Total Cash (%)
Account Receivables -----------
Account Receivables (%)
Inventories 8,598.679,128.778,910.909,457.1910,460.6011,390.0512,563.8512,546.0013,289.9814,078.0814,912.91
Inventories (%)
Accounts Payable 4,658.045,010.415,121.665,635.336,650.836,587.028,278.457,409.777,849.178,314.638,807.68
Accounts Payable (%)
Capital Expenditure -1,081.15-865.34-826.44-1,140.06-1,131.23-1,077.25-1,098.09-1,299.16-1,376.21-1,457.81-1,544.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 114.53
Diluted Shares Outstanding 802.96
Cost of Debt
Tax Rate 31.82
After-tax Cost of Debt -1.54
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.65
Total Debt 14,391.00
Total Equity 91,962.67
Total Capital 106,353.67
Debt Weighting 13.53
Equity Weighting 86.47
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 50,521.0053,415.8556,220.1959,070.5565,013.0568,614.7771,304.4775,532.8280,011.9284,756.6389,782.69
EBITDA 5,183.455,710.156,375.376,556.837,437.497,664.275,625.927,976.278,449.268,950.309,481.05
EBIT 3,561.734,150.414,789.964,967.835,844.676,127.304,021.575,967.096,320.946,695.777,092.83
Tax Rate 37.55%37.76%36.90%42.39%40.53%37.20%31.82%37.74%37.74%37.74%37.74%
EBIAT 2,224.242,583.133,022.292,862.213,475.793,847.842,741.873,715.323,935.644,169.024,416.24
Depreciation 1,621.721,559.741,585.411,589.001,592.821,536.971,604.352,009.172,128.322,254.532,388.22
Accounts Receivable -----------
Inventories --530.10217.87-546.30-1,003.40-929.45-1,173.8017.85-743.98-788.10-834.83
Accounts Payable -352.37111.25513.671,015.50-63.821,691.43-868.68439.40465.46493.06
Capital Expenditure --215.81-38.90313.62-8.83-53.9820.84201.0877.0481.6186.45
UFCF 3,845.963,749.344,897.924,732.215,071.874,337.574,884.705,074.735,836.426,182.516,549.14
WACC
PV UFCF 4,089.244,221.734,014.433,817.32
SUM PV UFCF 29,055.54

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 11.40
Free cash flow (t + 1) 6,811.10
Terminal Value 92,041.94
Present Value of Terminal Value 53,648.77

Intrinsic Value

Enterprise Value 82,704.31
Net Debt 13,663.69
Equity Value 69,040.62
Shares Outstanding 802.96
Equity Value Per Share 85.98