Discounted Cash Flow (DCF) Analysis Levered

Cummins Inc. (CMI)

$195.02

+9.13 (+4.91%)
All numbers are in Millions, Currency in USD
Stock DCF: 296.37 | 195.02 | undervalue

Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 20,42823,77123,57119,81124,02125,271.4426,586.9727,970.9929,427.0530,958.91
Revenue (%)
Operating Cash Flow 2,2772,3783,1812,7222,2562,920.233,072.253,232.173,400.433,577.44
Operating Cash Flow (%)
Capital Expenditure -587-784-775-575-786-790.19-831.33-874.60-920.13-968.03
Capital Expenditure (%)
Free Cash Flow 1,6901,5942,4062,1471,4702,130.032,240.922,357.572,480.302,609.41

Weighted Average Cost Of Capital

Share price $ 195.02
Beta 1.020
Diluted Shares Outstanding 149
Cost of Debt
Tax Rate 22.54
After-tax Cost of Debt 2.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.937
Total Debt 4,159
Total Equity 29,057.98
Total Capital 33,216.98
Debt Weighting 12.52
Equity Weighting 87.48
Wacc

Build Up Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 20,42823,77123,57119,81124,02125,271.4426,586.9727,970.9929,427.0530,958.91
Operating Cash Flow 2,2772,3783,1812,7222,2562,920.233,072.253,232.173,400.433,577.44
Capital Expenditure -587-784-775-575-786-790.19-831.33-874.60-920.13-968.03
Free Cash Flow 1,6901,5942,4062,1471,4702,130.032,240.922,357.572,480.302,609.41
WACC
PV LFCF 1,986.971,950.011,913.731,878.121,843.18
SUM PV LFCF 9,572.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.20
Free cash flow (t + 1) 2,661.60
Terminal Value 51,184.58
Present Value of Terminal Value 36,154.74

Intrinsic Value

Enterprise Value 45,726.76
Net Debt 1,567
Equity Value 44,159.76
Shares Outstanding 149
Equity Value Per Share 296.37