Discounted Cash Flow (DCF) Analysis Levered

Cummins Inc. (CMI)

$194.11

+0.58 (+0.30%)

All numbers are in Millions, Currency in USD

Stock DCF: 309.45 | 194.11 | 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	20,428	23,771	23,571	19,811	24,021	25,271.44	26,586.97	27,970.99	29,427.05	30,958.91
Revenue (%)
Operating Cash Flow	2,277	2,378	3,181	2,722	2,256	2,920.23	3,072.25	3,232.17	3,400.43	3,577.44
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	1,690	1,594	2,406	2,147	1,470	2,130.03	2,240.92	2,357.57	2,480.30	2,609.41

Weighted Average Cost Of Capital

Share price	$ 194.11
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	7.701
Total Debt	4,159
Total Equity	28,922.39
Total Capital	33,081.39
Debt Weighting	12.57
Equity Weighting	87.43
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	20,428	23,771	23,571	19,811	24,021	25,271.44	26,586.97	27,970.99	29,427.05	30,958.91
Operating Cash Flow	2,277	2,378	3,181	2,722	2,256	2,920.23	3,072.25	3,232.17	3,400.43	3,577.44
Capital Expenditure	-587	-784	-775	-575	-786	-790.19	-831.33	-874.60	-920.13	-968.03
Free Cash Flow	1,690	1,594	2,406	2,147	1,470	2,130.03	2,240.92	2,357.57	2,480.30	2,609.41
WACC
PV LFCF						1,990.87	1,957.67	1,925.02	1,892.91	1,861.34
SUM PV LFCF										9,627.82

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.99
Free cash flow (t + 1)	2,661.60
Terminal Value	53,338.64
Present Value of Terminal Value	38,047.49

Intrinsic Value

Enterprise Value	47,675.31
Net Debt	1,567
Equity Value	46,108.31
Shares Outstanding	149
Equity Value Per Share	309.45