Discounted Cash Flow (DCF) Analysis Levered

Warner Bros. Discovery, Inc. (DISCA)

$24.43

+1.36 (+-%)

All numbers are in Millions, Currency in USD

Stock DCF: 183.89 | 24.43 | 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	6,873	10,553	11,144	10,671	12,191	14,298.30	16,769.87	19,668.66	23,068.54	27,056.10
Revenue (%)
Operating Cash Flow	1,629	2,576	3,399	2,739	2,798	3,638.38	4,267.31	5,004.94	5,870.08	6,884.77
Operating Cash Flow (%)
Capital Expenditure	-135	-147	-289	-402	-373	-365.39	-428.55	-502.63	-589.51	-691.41
Capital Expenditure (%)
Free Cash Flow	1,494	2,429	3,110	2,337	2,425	3,273	3,838.76	4,502.31	5,280.57	6,193.36

Weighted Average Cost Of Capital

Share price	$ 24.43
Beta	1.127
Diluted Shares Outstanding	664
Cost of Debt
Tax Rate	29.80
After-tax Cost of Debt	3.01%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.940
Total Debt	14,759
Total Equity	16,221.52
Total Capital	30,980.52
Debt Weighting	47.64
Equity Weighting	52.36
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	6,873	10,553	11,144	10,671	12,191	14,298.30	16,769.87	19,668.66	23,068.54	27,056.10
Operating Cash Flow	1,629	2,576	3,399	2,739	2,798	3,638.38	4,267.31	5,004.94	5,870.08	6,884.77
Capital Expenditure	-135	-147	-289	-402	-373	-365.39	-428.55	-502.63	-589.51	-691.41
Free Cash Flow	1,494	2,429	3,110	2,337	2,425	3,273	3,838.76	4,502.31	5,280.57	6,193.36
WACC
PV LFCF						2,291.72	2,532.85	2,799.35	3,093.90	3,419.43
SUM PV LFCF										19,026.17

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.12
Free cash flow (t + 1)	6,317.22
Terminal Value	153,330.69
Present Value of Terminal Value	113,931.26

Intrinsic Value

Enterprise Value	132,957.42
Net Debt	10,854
Equity Value	122,103.42
Shares Outstanding	664
Equity Value Per Share	183.89