Discounted Cash Flow (DCF) Analysis Levered

Cummins Inc. (CMI)

$232.8

-1.88 (-0.80%)

All numbers are in Millions, Currency in USD

Stock DCF: 237.81 | 232.8 | 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	$ 232.8
Beta	1.074
Diluted Shares Outstanding	149
Cost of Debt
Tax Rate	23.70
After-tax Cost of Debt	1.93%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.418
Total Debt	7,855
Total Equity	34,687.20
Total Capital	42,542.20
Debt Weighting	18.46
Equity Weighting	81.54
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						2,058.04	2,006.47	1,956.19	1,907.17	1,859.38
SUM PV LFCF										9,787.25

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.04
Free cash flow (t + 1)	2,791.84
Terminal Value	46,222.51
Present Value of Terminal Value	31,400.07

Intrinsic Value

Enterprise Value	41,187.32
Net Debt	5,754
Equity Value	35,433.32
Shares Outstanding	149
Equity Value Per Share	237.81