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Discounted Cash Flow (DCF) Analysis Unlevered


The Michaels Companies Inc.

The Michaels Companies Inc. (MIK)

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 4,408.004,569.774,737.944,912.775,197.225,361.975,271.895,432.685,598.385,769.135,945.09
Revenue (%)
EBITDA 656.79699.63660.47826.33823.76853.63688.51821.42846.48872.29898.90
EBITDA (%)
EBIT 559.82593.61549.60711.37707.86734.59564.09697.01718.27740.18762.76
EBIT (%)
Depreciation 96.98106.02110.87114.96115.90119.04124.42124.41128.20132.11136.14
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 55.98239.00378.09409.23298.84425.74245.67319.44329.18339.22349.57
Total Cash (%)
Account Receivables ---9.3323.3926.2757.4629.8830.7931.7332.70
Account Receivables (%)
Inventories 862.20901.16958.011,002.701,127.801,123.331,108.681,114.241,148.231,183.251,219.34
Inventories (%)
Accounts Payable 263.16367.87447.26457.87517.12483.11485.01472.64487.06501.91517.22
Accounts Payable (%)
Capital Expenditure -123.86-111.96-137.87-123.80-114.34-127.61-145.50-140.16-144.44-148.84-153.38
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 8.19
Diluted Shares Outstanding 170.61
Cost of Debt
Tax Rate 23.38
After-tax Cost of Debt -1.12
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.46
Total Debt 2,681.00
Total Equity 1,397.30
Total Capital 4,078.30
Debt Weighting 65.74
Equity Weighting 34.26
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 4,408.004,569.774,737.944,912.775,197.225,361.975,271.895,432.685,598.385,769.135,945.09
EBITDA 656.79699.63660.47826.33823.76853.63688.51821.42846.48872.29898.90
EBIT 559.82593.61549.60711.37707.86734.59564.09697.01718.27740.18762.76
Tax Rate 36.51%35.83%38.07%36.57%35.00%35.53%23.38%34.41%34.41%34.41%34.41%
EBIAT 355.44380.94340.37451.24460.12473.56432.21457.16471.10485.47500.27
Depreciation 96.98106.02110.87114.96115.90119.04124.42124.41128.20132.11136.14
Accounts Receivable -----14.05-2.89-31.1927.58-0.91-0.94-0.97
Inventories --38.95-56.85-44.68-125.104.4614.65-5.56-33.98-35.02-36.09
Accounts Payable -104.7179.3910.6159.25-34.011.90-12.3714.4214.8615.31
Capital Expenditure --11.9125.91-14.07-9.4613.2817.89-5.344.274.414.54
UFCF 452.41540.81499.69518.05486.65573.44559.88585.87583.10600.88619.21
WACC
PV UFCF 517.12483.53468.13453.22
SUM PV UFCF 4,154.28

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.44
Free cash flow (t + 1) 643.98
Terminal Value 26,392.47
Present Value of Terminal Value 19,317.71

Intrinsic Value

Enterprise Value 23,471.99
Net Debt 2,435.33
Equity Value 21,036.66
Shares Outstanding 170.61
Equity Value Per Share 123.30