Discounted Cash Flow (DCF) Analysis Levered

Equity Residential (EQR)

$66.18

+0.95 (+1.46%)
All numbers are in Millions, Currency in USD
Stock DCF: 50.31 | 66.18 | overvalue

Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 2,701.072,571.702,4642,735.182,753.672,772.292,791.032,809.892,828.89
Revenue (%)
Operating Cash Flow 1,456.981,265.541,260.181,454.761,428.341,4381,447.721,457.501,467.36
Operating Cash Flow (%)
Capital Expenditure -183.38-156.08-152.72-221.09-186.83-188.09-189.36-190.64-191.93
Capital Expenditure (%)
Free Cash Flow 1,273.611,109.461,107.471,233.671,241.511,249.901,258.351,266.861,275.42

Weighted Average Cost Of Capital

Share price $ 66.18
Beta 0.832
Diluted Shares Outstanding 388.37
Cost of Debt
Tax Rate 4.81
After-tax Cost of Debt 4.76%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.673
Total Debt 2,392.14
Total Equity 25,702.59
Total Capital 28,094.73
Debt Weighting 8.51
Equity Weighting 91.49
Wacc

Build Up Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 2,701.072,571.702,4642,735.182,753.672,772.292,791.032,809.892,828.89
Operating Cash Flow 1,456.981,265.541,260.181,454.761,428.341,4381,447.721,457.501,467.36
Capital Expenditure -183.38-156.08-152.72-221.09-186.83-188.09-189.36-190.64-191.93
Free Cash Flow 1,273.611,109.461,107.471,233.671,241.511,249.901,258.351,266.861,275.42
WACC
PV LFCF 1,155.751,083.191,015.19951.45891.72
SUM PV LFCF 5,097.31

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.42
Free cash flow (t + 1) 1,300.93
Terminal Value 24,002.43
Present Value of Terminal Value 16,781.45

Intrinsic Value

Enterprise Value 21,878.76
Net Debt 2,338.27
Equity Value 19,540.48
Shares Outstanding 388.37
Equity Value Per Share 50.31