Discounted Cash Flow (DCF) Analysis Levered
Discover Financial Services (DFS)
$112.2
+1.42 (+1.28%)
All numbers are in Millions, Currency in USD
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 | 9,897 | 10,709 | 11,459 | 11,088 | 12,087 | 12,720.97 | 13,388.18 | 14,090.39 | 14,829.44 | 15,607.25 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 5,208 | 5,191 | 6,196 | 6,196 | 6,019 | 6,636.37 | 6,984.45 | 7,350.78 | 7,736.33 | 8,142.11 |
| Operating Cash Flow (%) | ||||||||||
| Capital Expenditure | -218 | -254 | -284 | -261 | -194 | -280.16 | -294.86 | -310.32 | -326.60 | -343.73 |
| Capital Expenditure (%) | ||||||||||
| Free Cash Flow | 4,990 | 4,937 | 5,912 | 5,935 | 5,825 | 6,356.21 | 6,689.59 | 7,040.46 | 7,409.74 | 7,798.38 |
Weighted Average Cost Of Capital
| Share price | $ 112.2 |
|---|---|
| Beta | 1.447 |
| Diluted Shares Outstanding | 307 |
| Cost of Debt | |
| Tax Rate | 22.86 |
| After-tax Cost of Debt | 4.33% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 9.572 |
| Total Debt | 20,227 |
| Total Equity | 34,445.40 |
| Total Capital | 54,672.40 |
| Debt Weighting | 37.00 |
| Equity Weighting | 63.00 |
| 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 | 9,897 | 10,709 | 11,459 | 11,088 | 12,087 | 12,720.97 | 13,388.18 | 14,090.39 | 14,829.44 | 15,607.25 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 5,208 | 5,191 | 6,196 | 6,196 | 6,019 | 6,636.37 | 6,984.45 | 7,350.78 | 7,736.33 | 8,142.11 |
| Capital Expenditure | -218 | -254 | -284 | -261 | -194 | -280.16 | -294.86 | -310.32 | -326.60 | -343.73 |
| Free Cash Flow | 4,990 | 4,937 | 5,912 | 5,935 | 5,825 | 6,356.21 | 6,689.59 | 7,040.46 | 7,409.74 | 7,798.38 |
| WACC | ||||||||||
| PV LFCF | 5,905.61 | 5,774.75 | 5,646.78 | 5,521.66 | 5,399.30 | |||||
| SUM PV LFCF | 28,248.10 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 7.63 |
| Free cash flow (t + 1) | 7,954.35 |
| Terminal Value | 141,285 |
| Present Value of Terminal Value | 97,820.38 |
Intrinsic Value
| Enterprise Value | 126,068.48 |
|---|---|
| Net Debt | 1,991 |
| Equity Value | 124,077.48 |
| Shares Outstanding | 307 |
| Equity Value Per Share | 404.16 |