Discounted Cash Flow (DCF) Analysis Levered

Eastman Chemical Company (EMN)

$88.965

-1.24 (-1.37%)

All numbers are in Millions, Currency in USD

Stock DCF: 104.86 | 88.965 | 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	9,549	10,151	9,273	8,473	10,476	10,807.76	11,150.03	11,503.14	11,867.43	12,243.26
Revenue (%)
Operating Cash Flow	1,657	1,543	1,504	1,455	1,619	1,759.48	1,815.20	1,872.68	1,931.99	1,993.17
Operating Cash Flow (%)
Capital Expenditure	-649	-528	-425	-383	-578	-575.38	-593.60	-612.40	-631.79	-651.80
Capital Expenditure (%)
Free Cash Flow	1,008	1,015	1,079	1,072	1,041	1,184.10	1,221.60	1,260.28	1,300.20	1,341.37

Weighted Average Cost Of Capital

Share price	$ 88.965
Beta	1.484
Diluted Shares Outstanding	136.50
Cost of Debt
Tax Rate	20.79
After-tax Cost of Debt	3.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.617
Total Debt	4,412
Total Equity	12,143.72
Total Capital	16,555.72
Debt Weighting	26.65
Equity Weighting	73.35
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	9,549	10,151	9,273	8,473	10,476	10,807.76	11,150.03	11,503.14	11,867.43	12,243.26
Operating Cash Flow	1,657	1,543	1,504	1,455	1,619	1,759.48	1,815.20	1,872.68	1,931.99	1,993.17
Capital Expenditure	-649	-528	-425	-383	-578	-575.38	-593.60	-612.40	-631.79	-651.80
Free Cash Flow	1,008	1,015	1,079	1,072	1,041	1,184.10	1,221.60	1,260.28	1,300.20	1,341.37
WACC
PV LFCF						716.23	679.52	644.69	611.65	580.30
SUM PV LFCF										4,914.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.74
Free cash flow (t + 1)	1,368.20
Terminal Value	20,299.68
Present Value of Terminal Value	13,351.88

Intrinsic Value

Enterprise Value	18,266.30
Net Debt	3,953
Equity Value	14,313.30
Shares Outstanding	136.50
Equity Value Per Share	104.86