Discounted Cash Flow (DCF) Analysis Levered

Allison Transmission Holdings, Inc. (ALSN)

$45.24

+0.67 (+1.50%)

All numbers are in Millions, Currency in USD

Stock DCF: 102.48 | 45.24 | undervalue

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	2,713	2,698	2,081	2,402	2,769	2,819.41	2,870.74	2,923.01	2,976.23	3,030.41
Revenue (%)
Operating Cash Flow	837	847	561	635	657	785.86	800.17	814.74	829.57	844.68
Operating Cash Flow (%)
Capital Expenditure	-	-	-115	-175	11	-116.67	-118.80	-120.96	-123.16	-125.40
Capital Expenditure (%)
Free Cash Flow	837	847	446	460	668	669.19	681.38	693.78	706.41	719.27

Weighted Average Cost Of Capital

Share price	$ 45.24
Beta	0.989
Diluted Shares Outstanding	114.12
Cost of Debt
Tax Rate	17.67
After-tax Cost of Debt	3.88%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.163
Total Debt	2,507
Total Equity	5,162.89
Total Capital	7,669.89
Debt Weighting	32.69
Equity Weighting	67.31
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	2,713	2,698	2,081	2,402	2,769	2,819.41	2,870.74	2,923.01	2,976.23	3,030.41
Operating Cash Flow	837	847	561	635	657	785.86	800.17	814.74	829.57	844.68
Capital Expenditure	-	-	-115	-175	11	-116.67	-118.80	-120.96	-123.16	-125.40
Free Cash Flow	837	847	446	460	668	669.19	681.38	693.78	706.41	719.27
WACC
PV LFCF						451.96	431.05	411.11	392.09	373.95
SUM PV LFCF										2,857.20

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.76
Free cash flow (t + 1)	733.66
Terminal Value	15,412.99
Present Value of Terminal Value	11,113.32

Intrinsic Value

Enterprise Value	13,970.52
Net Debt	2,275
Equity Value	11,695.52
Shares Outstanding	114.12
Equity Value Per Share	102.48