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Discounted Cash Flow (DCF) Analysis Unlevered


Progressive Corporation (The)

Progressive Corporation (The) (PGR)

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 18,170.9019,391.9820,854.1423,442.1426,838.9031,978.5635,835.1740,156.8944,999.8150,426.7956,508.26
Revenue (%)
EBITDA 1,938.842,121.482,164.661,783.952,522.863,587.993,597.854,031.754,517.985,062.855,673.43
EBITDA (%)
EBIT 1,837.082,024.522,014.511,584.692,286.673,325.773,339.843,742.624,193.984,699.785,266.57
EBIT (%)
Depreciation 101.7696.96150.15199.26236.18262.22258.01289.13324.00363.07406.86
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 --2,396.143,799.973,145.521,870.754,056.544,545.765,093.985,708.316,396.73
Total Cash (%)
Account Receivables 3,385.243,622.424,187.514,679.057,898.699,504.038,152.509,135.6910,237.4611,472.0912,855.63
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 1,784.381,894.602,068.732,496.593,481.015,046.224,113.884,610.015,165.985,789.006,487.15
Accounts Payable (%)
Capital Expenditure -136.28-102.78-120.95-208.64-139.56-255.83-243.68-273.07-306.00-342.90-384.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 76.71
Diluted Shares Outstanding 586.70
Cost of Debt
Tax Rate 17.18
After-tax Cost of Debt -0.81
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.55
Total Debt 4,404.90
Total Equity 45,005.76
Total Capital 49,410.66
Debt Weighting 8.91
Equity Weighting 91.09
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 18,170.9019,391.9820,854.1423,442.1426,838.9031,978.5635,835.1740,156.8944,999.8150,426.7956,508.26
EBITDA 1,938.842,121.482,164.661,783.952,522.863,587.993,597.854,031.754,517.985,062.855,673.43
EBIT 1,837.082,024.522,014.511,584.692,286.673,325.773,339.843,742.624,193.984,699.785,266.57
Tax Rate 32.24%32.84%32.53%28.63%25.35%17.18%28.13%28.13%28.13%28.13%28.13%
EBIAT 1,244.731,359.661,359.231,131.061,706.912,754.332,400.372,689.863,014.253,377.773,785.13
Depreciation 101.7696.96150.15199.26236.18262.22258.01289.13324.00363.07406.86
Accounts Receivable --237.18-565.09-491.54-3,219.64-1,605.341,351.53-983.19-1,101.76-1,234.64-1,383.53
Inventories -----------
Accounts Payable -110.21174.13427.86984.421,565.21-932.34496.13555.97623.02698.15
Capital Expenditure --33.5018.1887.68-69.07116.27-12.1529.3932.9336.9041.35
UFCF 1,346.481,296.151,136.611,354.32-361.203,092.693,065.422,521.322,825.393,166.133,547.96
WACC
PV UFCF 2,834.422,155.632,233.562,314.312,397.98
SUM PV UFCF 13,389.55

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.15
Free cash flow (t + 1) 3,689.88
Terminal Value 88,912.80
Present Value of Terminal Value 60,094.08

Intrinsic Value

Enterprise Value 73,483.63
Net Debt 2,534.15
Equity Value 70,949.47
Shares Outstanding 586.70
Equity Value Per Share 120.93