Discounted Cash Flow (DCF) Analysis Levered

Elanco Animal Health Incorporated (ELAN)

$9.22

+0.62 (+7.21%)

All numbers are in Millions, Currency in USD

Stock DCF: -1.36 | 9.22 | overvalue

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	3,066.80	3,071	3,273.30	4,765	4,411	4,905.77	5,456.04	6,068.03	6,748.66	7,505.64
Revenue (%)
Operating Cash Flow	487.30	224.10	-41	483	452	415.20	461.77	513.57	571.18	635.24
Operating Cash Flow (%)
Capital Expenditure	-134.50	-197.40	-310.90	-197	-184	-280.78	-312.27	-347.30	-386.26	-429.58
Capital Expenditure (%)
Free Cash Flow	352.80	26.70	-351.90	286	268	134.42	149.50	166.27	184.92	205.66

Weighted Average Cost Of Capital

Share price	$ 9.22
Beta	0.922
Diluted Shares Outstanding	488.30
Cost of Debt
Tax Rate	-8.33
After-tax Cost of Debt	4.13%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.044
Total Debt	5,836
Total Equity	4,502.13
Total Capital	10,338.13
Debt Weighting	56.45
Equity Weighting	43.55
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	3,066.80	3,071	3,273.30	4,765	4,411	4,905.77	5,456.04	6,068.03	6,748.66	7,505.64
Operating Cash Flow	487.30	224.10	-41	483	452	415.20	461.77	513.57	571.18	635.24
Capital Expenditure	-134.50	-197.40	-310.90	-197	-184	-280.78	-312.27	-347.30	-386.26	-429.58
Free Cash Flow	352.80	26.70	-351.90	286	268	134.42	149.50	166.27	184.92	205.66
WACC
PV LFCF						127.02	133.48	140.28	147.42	154.92
SUM PV LFCF										703.12

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.83
Free cash flow (t + 1)	209.77
Terminal Value	5,477.15
Present Value of Terminal Value	4,125.82

Intrinsic Value

Enterprise Value	4,828.94
Net Debt	5,491
Equity Value	-662.06
Shares Outstanding	488.30
Equity Value Per Share	-1.36