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Discounted Cash Flow (DCF) Analysis Unlevered


Nabors Industries Ltd.

Nabors Industries Ltd. (NBR)

Energy

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 6,248.636,809.763,791.672,006.932,565.263,047.792,829.872,627.532,439.672,265.232,103.27
Revenue (%)
EBITDA 1,407.82718.43684.40-156.94438.66533.97367.60341.32316.91294.25273.21
EBITDA (%)
EBIT 308.06-429.70-288.93-1,031.16-406.85-334.65-411.18-381.78-354.48-329.14-305.60
EBIT (%)
Depreciation 1,099.761,148.13973.32874.22845.51868.62778.78723.10671.40623.39578.82
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 507.39535.93274.52295.22365.29481.86320.62297.70276.41256.65238.30
Total Cash (%)
Account Receivables 1,399.691,517.21784.50508.36698.52756.46673.23625.09580.40538.90500.37
Account Receivables (%)
Inventories 209.95230.17153.94103.56166.23165.49131.59122.18113.44105.3397.80
Inventories (%)
Accounts Payable 545.51780.40271.86264.51363.50392.86318.93296.12274.95255.29237.04
Accounts Payable (%)
Capital Expenditure -1,178.49-1,821.61-867.16-395.37-574.36-459.00-592.57-550.21-510.87-474.34-440.42
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 1.97
Diluted Shares Outstanding 334.40
Cost of Debt
Tax Rate -14.11
After-tax Cost of Debt 0.76
Risk-Free Rate
Market Risk Premium
Cost of Equity 21.07
Total Debt 3,585.88
Total Equity 658.76
Total Capital 4,244.65
Debt Weighting 84.48
Equity Weighting 15.52
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 6,248.636,809.763,791.672,006.932,565.263,047.792,829.872,627.532,439.672,265.232,103.27
EBITDA 1,407.82718.43684.40-156.94438.66533.97367.60341.32316.91294.25273.21
EBIT 308.06-429.70-288.93-1,031.16-406.85-334.65-411.18-381.78-354.48-329.14-305.60
Tax Rate -65.07%-10.31%20.83%15.36%13.17%-14.11%-6.69%-6.69%-6.69%-6.69%-6.69%
EBIAT 508.51-473.98-228.75-872.80-353.25-381.88-438.68-407.32-378.19-351.15-326.05
Depreciation 1,099.761,148.13973.32874.22845.51868.62778.78723.10671.40623.39578.82
Accounts Receivable --117.52732.72276.14-190.16-57.9483.2348.1444.6941.5038.53
Inventories --20.2276.2350.38-62.670.7333.919.418.748.117.53
Accounts Payable -234.89-508.54-7.3598.9829.36-73.93-22.80-21.17-19.66-18.25
Capital Expenditure -643.12-954.45-471.79179.00-115.37133.58-42.37-39.34-36.53-33.92
UFCF 1,608.271,414.4290.53-151.20517.40343.53516.88308.15286.12265.66246.67
WACC
PV UFCF 478.20263.75226.56194.62167.18
SUM PV UFCF 4,059.66

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.09
Free cash flow (t + 1) 256.53
Terminal Value 6,272.23
Present Value of Terminal Value 4,251.03

Intrinsic Value

Enterprise Value 8,310.69
Net Debt 3,104.03
Equity Value 5,206.66
Shares Outstanding 334.40
Equity Value Per Share 15.57

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
10.09 (%) 8.08 Buy 8.71 Buy 9.51 Buy 10.52 Buy 11.87 Buy 13.75 Buy 16.55 Buy 21.15 Buy 30.17 Buy
9.59 (%) 7.72 Buy 8.28 Buy 8.97 Buy 9.85 Buy 10.99 Buy 12.54 Buy 14.77 Buy 18.24 Buy 24.39 Buy
9.09 (%) 7.39 Buy 7.89 Buy 8.50 Buy 9.27 Buy 10.24 Buy 11.54 Buy 13.35 Buy 16.05 Buy 20.48 Buy
8.59 (%) 7.10 Buy 7.54 Buy 8.09 Buy 8.75 Buy 9.60 Buy 10.70 Buy 12.19 Buy 14.34 Buy 17.68 Buy
8.09 (%) 6.83 Buy 7.23 Buy 7.71 Buy 8.30 Buy 9.04 Buy 9.98 Buy 11.23 Buy 12.97 Buy 15.57 Buy
7.59 (%) 6.58 Buy 6.95 Buy 7.38 Buy 7.90 Buy 8.55 Buy 9.36 Buy 10.42 Buy 11.86 Buy 13.93 Buy
7.09 (%) 6.36 Buy 6.69 Buy 7.08 Buy 7.54 Buy 8.11 Buy 8.82 Buy 9.73 Buy 10.93 Buy 12.61 Buy
6.59 (%) 6.15 Buy 6.45 Buy 6.80 Buy 7.22 Buy 7.72 Buy 8.34 Buy 9.13 Buy 10.15 Buy 11.54 Buy
6.09 (%) 5.97 Buy 6.24 Buy 6.56 Buy 6.93 Buy 7.38 Buy 7.93 Buy 8.61 Buy 9.48 Buy 10.65 Buy