Discounted Cash Flow (DCF) Analysis Levered

Cummins Inc. (CMI)

$223.95

+0.20 (+0.09%)

All numbers are in Millions, Currency in USD

Stock DCF: 234.59 | 223.95 | 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	23,771	23,571	19,811	24,021	28,074	29,571.07	31,147.98	32,808.98	34,558.55	36,401.42
Revenue (%)
Operating Cash Flow	2,378	3,181	2,722	2,256	1,962	3,171.17	3,340.28	3,518.40	3,706.02	3,903.65
Operating Cash Flow (%)
Capital Expenditure	-784	-775	-575	-786	-916	-947.66	-998.20	-1,051.43	-1,107.49	-1,166.55
Capital Expenditure (%)
Free Cash Flow	1,594	2,406	2,147	1,470	1,046	2,223.51	2,342.08	2,466.97	2,598.53	2,737.10

Weighted Average Cost Of Capital

Share price	$ 223.95
Beta	1.069
Diluted Shares Outstanding	149
Cost of Debt
Tax Rate	23.70
After-tax Cost of Debt	3.22%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.265
Total Debt	7,855
Total Equity	33,368.55
Total Capital	41,223.55
Debt Weighting	19.05
Equity Weighting	80.95
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	23,771	23,571	19,811	24,021	28,074	29,571.07	31,147.98	32,808.98	34,558.55	36,401.42
Operating Cash Flow	2,378	3,181	2,722	2,256	1,962	3,171.17	3,340.28	3,518.40	3,706.02	3,903.65
Capital Expenditure	-784	-775	-575	-786	-916	-947.66	-998.20	-1,051.43	-1,107.49	-1,166.55
Free Cash Flow	1,594	2,406	2,147	1,470	1,046	2,223.51	2,342.08	2,466.97	2,598.53	2,737.10
WACC
PV LFCF						2,056.71	2,003.87	1,952.39	1,902.23	1,853.37
SUM PV LFCF										9,768.58

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.11
Free cash flow (t + 1)	2,791.84
Terminal Value	45,692.96
Present Value of Terminal Value	30,939.97

Intrinsic Value

Enterprise Value	40,708.55
Net Debt	5,754
Equity Value	34,954.55
Shares Outstanding	149
Equity Value Per Share	234.59