Discounted Cash Flow (DCF) Analysis Levered

East West Bancorp, Inc. (EWBC)

$68.82

-0.40 (-0.58%)
All numbers are in Millions, Currency in USD
Stock DCF: 129.50 | 68.82 | 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 1,352.341,548.021,662.901,599.211,801.311,939.562,088.412,248.692,421.262,607.09
Revenue (%)
Operating Cash Flow 696.91883.17735.83693.331,168.421,012.661,090.381,174.061,264.161,361.18
Operating Cash Flow (%)
Capital Expenditure -13.75-13.79-9.86-2.66-6.02-11.64-12.53-13.50-14.53-15.65
Capital Expenditure (%)
Free Cash Flow 683.15869.39725.97690.671,162.401,001.021,077.841,160.561,249.631,345.53

Weighted Average Cost Of Capital

Share price $ 68.82
Beta 1.431
Diluted Shares Outstanding 141.56
Cost of Debt
Tax Rate 17.36
After-tax Cost of Debt 14.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.258
Total Debt 506.86
Total Equity 9,742.43
Total Capital 10,249.30
Debt Weighting 4.95
Equity Weighting 95.05
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 1,352.341,548.021,662.901,599.211,801.311,939.562,088.412,248.692,421.262,607.09
Operating Cash Flow 696.91883.17735.83693.331,168.421,012.661,090.381,174.061,264.161,361.18
Capital Expenditure -13.75-13.79-9.86-2.66-6.02-11.64-12.53-13.50-14.53-15.65
Free Cash Flow 683.15869.39725.97690.671,162.401,001.021,077.841,160.561,249.631,345.53
WACC
PV LFCF 906.31883.53861.33839.69818.59
SUM PV LFCF 4,309.46

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.45
Free cash flow (t + 1) 1,372.45
Terminal Value 16,241.95
Present Value of Terminal Value 9,881.20

Intrinsic Value

Enterprise Value 14,190.66
Net Debt -4,142.56
Equity Value 18,333.22
Shares Outstanding 141.56
Equity Value Per Share 129.50