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Discounted Cash Flow (DCF) Analysis Unlevered


Morgan Stanley

Morgan Stanley (MS)

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 32,493.0034,273.6235,154.4534,630.6537,944.8040,107.6541,860.3643,689.6645,598.8947,591.5749,671.32
Revenue (%)
EBITDA 5,345.104,537.839,758.8710,441.1412,032.3012,942.7411,314.8511,809.3112,325.3812,864.0013,426.16
EBITDA (%)
EBIT 3,834.173,375.958,324.578,706.1410,279.2511,097.799,498.129,913.1810,346.3910,798.5311,270.42
EBIT (%)
Depreciation 1,510.921,161.881,434.301,735.001,753.051,844.951,816.741,896.131,978.992,065.472,155.74
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 --315,623.67304,552.30288,661.27302,030.69344,410.28359,461.01375,169.46391,564.36408,675.73
Total Cash (%)
Account Receivables 57,103.2048,959.8645,405.4946,460.4856,188.6653,299.0657,528.6960,042.6962,666.5665,405.0968,263.29
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 157,126.40181,067.52186,624.42190,513.58191,511.20179,557.95214,467.36223,839.58233,621.37243,830.63254,486.02
Accounts Payable (%)
Capital Expenditure -1,315.97-990.51-1,374.54-1,274.41-1,627.83-1,865.01-1,628.37-1,699.53-1,773.80-1,851.31-1,932.21
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 40.02
Diluted Shares Outstanding 1,738.00
Cost of Debt
Tax Rate 21.17
After-tax Cost of Debt -1.01
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.13
Total Debt 164,913.00
Total Equity 69,554.76
Total Capital 234,467.76
Debt Weighting 70.34
Equity Weighting 29.66
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 32,493.0034,273.6235,154.4534,630.6537,944.8040,107.6541,860.3643,689.6645,598.8947,591.5749,671.32
EBITDA 5,345.104,537.839,758.8710,441.1412,032.3012,942.7411,314.8511,809.3112,325.3812,864.0013,426.16
EBIT 3,834.173,375.958,324.578,706.1410,279.2511,097.799,498.129,913.1810,346.3910,798.5311,270.42
Tax Rate 23.53%-2.67%26.42%31.32%40.55%21.17%23.39%23.39%23.39%23.39%23.39%
EBIAT 2,932.133,465.926,125.215,979.796,111.158,747.837,276.827,594.817,926.718,273.108,634.64
Depreciation 1,510.921,161.881,434.301,735.001,753.051,844.951,816.741,896.131,978.992,065.472,155.74
Accounts Receivable -8,143.343,554.38-1,054.99-9,728.182,889.60-4,229.63-2,514.00-2,623.87-2,738.53-2,858.20
Inventories -----------
Accounts Payable -23,941.125,556.903,889.16997.62-11,953.2534,909.409,372.229,781.7910,209.2510,655.40
Capital Expenditure --325.46384.03-100.13353.42237.17-236.6471.1674.2777.5180.90
UFCF 4,443.0636,386.7917,054.8310,448.82-512.941,766.3139,536.6916,420.3217,137.8917,886.8218,668.47
WACC
PV UFCF 37,169.0314,512.5414,239.6713,971.9313,709.23
SUM PV UFCF 124,132.23

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.37
Free cash flow (t + 1) 19,415.21
Terminal Value 819,207.24
Present Value of Terminal Value 601,586.37

Intrinsic Value

Enterprise Value 725,718.60
Net Debt -137,117.69
Equity Value 862,836.28
Shares Outstanding 1,738.00
Equity Value Per Share 496.45

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
8.37 (%) 249.79 Buy 264.47 Buy 283.75 Buy 310.21 Buy 348.79 Buy 410.26 Buy 523.59 Buy 802.39 Buy 2,588.20 Buy
7.87 (%) 241.97 Buy 254.69 Buy 271.12 Buy 293.14 Buy 324.21 Buy 371.33 Buy 451.28 Buy 616.76 Buy 1,162.63 Buy
7.37 (%) 235.04 Buy 246.15 Buy 260.28 Buy 278.84 Buy 304.31 Buy 341.44 Buy 400.61 Buy 509.70 Buy 778.07 Buy
6.87 (%) 228.87 Buy 238.63 Buy 250.88 Buy 266.69 Buy 287.90 Buy 317.81 Buy 363.17 Buy 440.15 Buy 599.46 Buy
6.37 (%) 223.34 Buy 231.97 Buy 242.67 Buy 256.27 Buy 274.15 Buy 298.67 Buy 334.43 Buy 391.40 Buy 496.45 Buy
5.87 (%) 218.37 Buy 226.04 Buy 235.45 Buy 247.24 Buy 262.47 Buy 282.89 Buy 311.70 Buy 355.39 Buy 429.53 Buy
5.37 (%) 213.87 Buy 220.73 Buy 229.04 Buy 239.35 Buy 252.45 Buy 269.67 Buy 293.29 Buy 327.74 Buy 382.62 Buy
4.87 (%) 209.80 Buy 215.95 Buy 223.34 Buy 232.40 Buy 243.77 Buy 258.44 Buy 278.11 Buy 305.86 Buy 347.96 Buy
4.37 (%) 206.09 Buy 211.63 Buy 218.23 Buy 226.25 Buy 236.18 Buy 248.80 Buy 265.39 Buy 288.16 Buy 321.34 Buy