Discounted Cash Flow (DCF) Analysis Levered

AAR Corp. (AIR)

$50.64

+0.73 (+1.46%)

All numbers are in Millions, Currency in USD

Stock DCF: 10.95 | 50.64 | overvalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,748.30	2,051.80	2,072	1,652.30	1,820	1,857.48	1,895.74	1,934.78	1,974.63	2,015.29
Revenue (%)
Operating Cash Flow	64.30	67.40	-36.10	105.20	75.20	58.40	59.60	60.83	62.08	63.36
Operating Cash Flow (%)
Capital Expenditure	-22	-17.40	-23.60	-11.30	-17.30	-18.13	-18.50	-18.88	-19.27	-19.67
Capital Expenditure (%)
Free Cash Flow	42.30	50	-59.70	93.90	57.90	40.27	41.10	41.94	42.81	43.69

Weighted Average Cost Of Capital

Share price	$ 50.64
Beta	1.559
Diluted Shares Outstanding	36
Cost of Debt
Tax Rate	25.12
After-tax Cost of Debt	1.15%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.888
Total Debt	156.30
Total Equity	1,823.04
Total Capital	1,979.34
Debt Weighting	7.90
Equity Weighting	92.10
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,748.30	2,051.80	2,072	1,652.30	1,820	1,857.48	1,895.74	1,934.78	1,974.63	2,015.29
Operating Cash Flow	64.30	67.40	-36.10	105.20	75.20	58.40	59.60	60.83	62.08	63.36
Capital Expenditure	-22	-17.40	-23.60	-11.30	-17.30	-18.13	-18.50	-18.88	-19.27	-19.67
Free Cash Flow	42.30	50	-59.70	93.90	57.90	40.27	41.10	41.94	42.81	43.69
WACC
PV LFCF						36.57	33.89	31.41	29.11	26.98
SUM PV LFCF										157.96

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	10.12
Free cash flow (t + 1)	44.56
Terminal Value	548.80
Present Value of Terminal Value	338.91

Intrinsic Value

Enterprise Value	496.87
Net Debt	102.80
Equity Value	394.07
Shares Outstanding	36
Equity Value Per Share	10.95