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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 5,183.455,710.156,375.376,556.837,437.497,664.275,625.928,014.038,489.268,992.689,525.94
EBITDA (%)
EBIT 3,561.734,150.414,789.964,967.835,844.676,127.304,021.576,080.396,440.966,822.917,227.51
EBIT (%)
Depreciation 1,621.721,559.741,585.411,589.001,592.821,536.971,604.351,933.642,048.312,169.772,298.44
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 666.88576.89590.31714.75656.63693.01727.31800.65848.13898.42951.70
Total Cash (%)
Account Receivables -----------
Account Receivables (%)
Inventories 8,598.679,128.778,910.909,457.1910,460.6011,390.0512,563.8512,493.1313,233.9714,018.7514,850.06
Inventories (%)
Accounts Payable 4,658.045,010.415,121.665,635.336,650.836,587.028,278.457,485.307,929.188,399.388,897.46
Accounts Payable (%)
Capital Expenditure -1,081.15-865.34-826.44-1,140.06-1,131.23-1,077.25-1,098.09-1,246.29-1,320.20-1,398.48-1,481.41
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 96.66
Diluted Shares Outstanding -
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 -
Total Capital 14,391.00
Debt Weighting 100.00
Equity Weighting 0.00
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 5,183.455,710.156,375.376,556.837,437.497,664.275,625.928,014.038,489.268,992.689,525.94
EBIT 3,561.734,150.414,789.964,967.835,844.676,127.304,021.576,080.396,440.966,822.917,227.51
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 2,224.242,583.133,022.292,862.213,475.793,847.842,741.873,785.864,010.364,248.184,500.10
Depreciation 1,621.721,559.741,585.411,589.001,592.821,536.971,604.351,933.642,048.312,169.772,298.44
Accounts Receivable -----------
Inventories --530.10217.87-546.30-1,003.40-929.45-1,173.8070.72-740.84-784.77-831.31
Accounts Payable -352.37111.25513.671,015.50-63.821,691.43-793.15443.88470.20498.08
Capital Expenditure --215.81-38.90313.62-8.83-53.9820.84148.2073.9178.2982.93
UFCF 3,845.963,749.344,897.924,732.215,071.874,337.574,884.705,145.285,835.616,181.666,548.23
WACC
PV UFCF 4,811.545,277.145,405.745,537.47
SUM PV UFCF 44,690.54

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 3.41
Free cash flow (t + 1) 6,810.16
Terminal Value -1,154,264.95
Present Value of Terminal Value -976,096.64

Intrinsic Value

Enterprise Value -931,406.10
Net Debt 13,663.69
Equity Value -945,069.80
Shares Outstanding -
Equity Value Per Share -Infinity

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
5.41 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell -Infinity Sell -Infinity Sell
4.91 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell -Infinity Sell -Infinity Sell
4.41 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell -Infinity Sell
3.91 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell -Infinity Sell
3.41 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell
2.91 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy -Infinity Sell
2.41 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
1.91 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy
1.41 (%) Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy Infinity Buy