Discounted Cash Flow (DCF) Analysis Levered

Diageo plc (DEO)

$171.26

-3.23 (-1.85%)
All numbers are in Millions, Currency in USD
Stock DCF: 183.34 | 171.26 | 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 12,16312,86711,75212,73315,45216,488.2117,593.9118,773.7520,032.7221,376.11
Revenue (%)
Operating Cash Flow 3,0843,2482,3203,6543,9354,105.664,380.984,674.774,988.265,322.77
Operating Cash Flow (%)
Capital Expenditure -584-671-700-626-1,097-922.96-984.86-1,050.90-1,121.37-1,196.57
Capital Expenditure (%)
Free Cash Flow 2,5002,5771,6203,0282,8383,182.703,396.133,623.873,866.894,126.20

Weighted Average Cost Of Capital

Share price $ 171.26
Beta 0.410
Diluted Shares Outstanding 581.25
Cost of Debt
Tax Rate 25.94
After-tax Cost of Debt 2.32%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.579
Total Debt 16,020
Total Equity 99,544.88
Total Capital 115,564.88
Debt Weighting 13.86
Equity Weighting 86.14
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 12,16312,86711,75212,73315,45216,488.2117,593.9118,773.7520,032.7221,376.11
Operating Cash Flow 3,0843,2482,3203,6543,9354,105.664,380.984,674.774,988.265,322.77
Capital Expenditure -584-671-700-626-1,097-922.96-984.86-1,050.90-1,121.37-1,196.57
Free Cash Flow 2,5002,5771,6203,0282,8383,182.703,396.133,623.873,866.894,126.20
WACC
PV LFCF 3,027.393,072.773,118.843,165.593,213.05
SUM PV LFCF 15,597.64

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.13
Free cash flow (t + 1) 4,208.72
Terminal Value 134,464
Present Value of Terminal Value 104,706.28

Intrinsic Value

Enterprise Value 120,303.91
Net Debt 13,735
Equity Value 106,568.91
Shares Outstanding 581.25
Equity Value Per Share 183.34