Discounted Cash Flow (DCF) Analysis Levered
Canadian Pacific Railway Limited (CP)
$78.69
+2.41 (+3.16%)
All numbers are in Millions, Currency in USD
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 | 7,316 | 7,792 | 7,710 | 7,995 | 8,814 | 9,241.35 | 9,689.43 | 10,159.23 | 10,651.81 | 11,168.27 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 2,712 | 2,990 | 2,802 | 3,688 | 4,142 | 3,787.23 | 3,970.86 | 4,163.39 | 4,365.26 | 4,576.91 |
| Operating Cash Flow (%) | ||||||||||
| Capital Expenditure | -1,551 | -1,647 | -1,671 | -1,532 | -1,557 | -1,863.75 | -1,954.11 | -2,048.86 | -2,148.20 | -2,252.36 |
| Capital Expenditure (%) | ||||||||||
| Free Cash Flow | 1,161 | 1,343 | 1,131 | 2,156 | 2,585 | 1,923.48 | 2,016.75 | 2,114.53 | 2,217.05 | 2,324.55 |
Weighted Average Cost Of Capital
| Share price | $ 78.69 |
|---|---|
| Beta | 0.833 |
| Diluted Shares Outstanding | 932.90 |
| Cost of Debt | |
| Tax Rate | 15.15 |
| After-tax Cost of Debt | 2.77% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 7.622 |
| Total Debt | 19,921 |
| Total Equity | 73,409.90 |
| Total Capital | 93,330.90 |
| Debt Weighting | 21.34 |
| Equity Weighting | 78.66 |
| 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 | 7,316 | 7,792 | 7,710 | 7,995 | 8,814 | 9,241.35 | 9,689.43 | 10,159.23 | 10,651.81 | 11,168.27 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 2,712 | 2,990 | 2,802 | 3,688 | 4,142 | 3,787.23 | 3,970.86 | 4,163.39 | 4,365.26 | 4,576.91 |
| Capital Expenditure | -1,551 | -1,647 | -1,671 | -1,532 | -1,557 | -1,863.75 | -1,954.11 | -2,048.86 | -2,148.20 | -2,252.36 |
| Free Cash Flow | 1,161 | 1,343 | 1,131 | 2,156 | 2,585 | 1,923.48 | 2,016.75 | 2,114.53 | 2,217.05 | 2,324.55 |
| WACC | ||||||||||
| PV LFCF | 1,804.56 | 1,775.08 | 1,746.08 | 1,717.55 | 1,689.49 | |||||
| SUM PV LFCF | 8,732.78 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 6.59 |
| Free cash flow (t + 1) | 2,371.04 |
| Terminal Value | 51,656.67 |
| Present Value of Terminal Value | 37,544.31 |
Intrinsic Value
| Enterprise Value | 46,277.08 |
|---|---|
| Net Debt | 19,470 |
| Equity Value | 26,807.08 |
| Shares Outstanding | 932.90 |
| Equity Value Per Share | 28.74 |