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Discounted Cash Flow (DCF) Analysis Unlevered


Western Digital Corporation

Western Digital Corporation (WDC)

Technology

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 15,351.0015,129.9514,571.6512,993.5419,092.7120,646.8622,261.4424,002.2825,879.2627,903.0230,085.04
Revenue (%)
EBITDA 2,509.893,051.712,739.471,573.523,744.084,816.914,185.154,512.434,865.305,245.775,655.99
EBITDA (%)
EBIT 1,277.201,808.031,626.20419.691,615.242,760.482,143.782,311.422,492.172,687.062,897.19
EBIT (%)
Depreciation 1,232.691,243.681,113.271,153.832,128.842,056.432,041.372,201.012,373.132,558.712,758.80
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 4,309.035,088.205,286.598,378.246,354.055,004.808,543.949,212.089,932.4610,709.1811,546.64
Total Cash (%)
Account Receivables 1,793.001,989.591,531.481,460.471,947.462,196.832,482.152,676.252,885.543,111.193,354.48
Account Receivables (%)
Inventories 1,188.171,225.531,368.282,129.642,340.772,944.242,689.182,899.483,126.213,370.683,634.27
Inventories (%)
Accounts Payable 1,989.491,971.431,881.202,055.582,350.312,523.052,951.873,182.703,431.593,699.943,989.28
Accounts Payable (%)
Capital Expenditure -951.76-627.89-612.01-583.41-557.51-809.36-877.10-945.69-1,019.64-1,099.38-1,185.35
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 55.23
Diluted Shares Outstanding 307.00
Cost of Debt
Tax Rate 67.63
After-tax Cost of Debt -3.33
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.35
Total Debt 10,993.00
Total Equity 16,955.61
Total Capital 27,948.61
Debt Weighting 39.33
Equity Weighting 60.67
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 15,351.0015,129.9514,571.6512,993.5419,092.7120,646.8622,261.4424,002.2825,879.2627,903.0230,085.04
EBITDA 2,509.893,051.712,739.471,573.523,744.084,816.914,185.154,512.434,865.305,245.775,655.99
EBIT 1,277.201,808.031,626.20419.691,615.242,760.482,143.782,311.422,492.172,687.062,897.19
Tax Rate 19.80%7.71%7.10%-58.17%48.37%67.63%15.41%15.41%15.41%15.41%15.41%
EBIAT 1,024.271,668.711,510.70663.83833.88893.681,813.491,955.302,108.212,273.072,450.82
Depreciation 1,232.691,243.681,113.271,153.832,128.842,056.432,041.372,201.012,373.132,558.712,758.80
Accounts Receivable --196.59458.1171.01-486.98-249.37-285.33-194.10-209.28-225.65-243.29
Inventories --37.36-142.75-761.36-211.12-603.48255.06-210.29-226.74-244.47-263.59
Accounts Payable --18.06-90.23174.38294.73172.73428.82230.84248.89268.35289.34
Capital Expenditure --323.87-15.88-28.60-25.90251.8567.7468.5973.9579.7485.97
UFCF 2,256.962,336.522,833.221,273.072,533.442,521.854,321.164,051.344,368.154,709.745,078.04
WACC
PV UFCF 3,952.043,388.763,341.653,295.193,249.38
SUM PV UFCF 20,255.40

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.34
Free cash flow (t + 1) 5,281.16
Terminal Value 98,898.22
Present Value of Terminal Value 63,283.88

Intrinsic Value

Enterprise Value 83,539.29
Net Debt 5,988.20
Equity Value 77,551.08
Shares Outstanding 307.00
Equity Value Per Share 252.61

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
11.34 (%) 144.74 Buy 155.37 Buy 168.27 Buy 184.26 Buy 204.62 Buy 231.39 Buy 268.20 Buy 321.96 Buy 407.91 Buy
10.84 (%) 138.43 Buy 147.96 Buy 159.42 Buy 173.48 Buy 191.13 Buy 213.94 Buy 244.56 Buy 287.82 Buy 353.63 Buy
10.34 (%) 132.69 Buy 141.27 Buy 151.50 Buy 163.94 Buy 179.35 Buy 198.96 Buy 224.76 Buy 260.22 Buy 312.03 Buy
9.84 (%) 127.44 Buy 135.20 Buy 144.38 Buy 155.43 Buy 168.98 Buy 185.99 Buy 207.97 Buy 237.48 Buy 279.18 Buy
9.34 (%) 122.64 Buy 129.67 Buy 137.94 Buy 147.81 Buy 159.80 Buy 174.65 Buy 193.56 Buy 218.43 Buy 252.61 Buy
8.84 (%) 118.23 Buy 124.63 Buy 132.10 Buy 140.96 Buy 151.61 Buy 164.67 Buy 181.07 Buy 202.26 Buy 230.71 Buy
8.34 (%) 114.18 Buy 120.01 Buy 126.79 Buy 134.76 Buy 144.28 Buy 155.84 Buy 170.16 Buy 188.39 Buy 212.37 Buy
7.84 (%) 110.43 Buy 115.77 Buy 121.94 Buy 129.15 Buy 137.68 Buy 147.96 Buy 160.56 Buy 176.37 Buy 196.81 Buy
7.34 (%) 106.97 Buy 111.86 Buy 117.49 Buy 124.03 Buy 131.72 Buy 140.90 Buy 152.05 Buy 165.86 Buy 183.45 Buy