Discounted Cash Flow (DCF) Analysis Levered

The Gap, Inc. (GPS)

$19.16

+0.12 (+0.63%)
All numbers are in Millions, Currency in USD
Stock DCF: -6.99 | 19.16 | 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 16,58016,38313,80016,67015,61615,519.1715,422.9515,327.3215,232.2915,137.84
Revenue (%)
Operating Cash Flow 1,3811,411237809607850.43845.16839.92834.71829.53
Operating Cash Flow (%)
Capital Expenditure -705-1,045-392-694-685-683.49-679.26-675.04-670.86-666.70
Capital Expenditure (%)
Free Cash Flow 676366-155115-78166.94165.90164.87163.85162.84

Weighted Average Cost Of Capital

Share price $ 19.16
Beta 2.238
Diluted Shares Outstanding 367
Cost of Debt
Tax Rate -45.32
After-tax Cost of Debt 4.30%
Risk-Free Rate
Market Risk Premium
Cost of Equity 14.860
Total Debt 6,020
Total Equity 7,031.72
Total Capital 13,051.72
Debt Weighting 46.12
Equity Weighting 53.88
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 16,58016,38313,80016,67015,61615,519.1715,422.9515,327.3215,232.2915,137.84
Operating Cash Flow 1,3811,411237809607850.43845.16839.92834.71829.53
Capital Expenditure -705-1,045-392-694-685-683.49-679.26-675.04-670.86-666.70
Free Cash Flow 676366-155115-78166.94165.90164.87163.85162.84
WACC
PV LFCF 151.77137.13123.91111.95101.15
SUM PV LFCF 625.92

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.99
Free cash flow (t + 1) 168.53
Terminal Value 2,596.83
Present Value of Terminal Value 1,613.16

Intrinsic Value

Enterprise Value 2,239.08
Net Debt 4,805
Equity Value -2,565.92
Shares Outstanding 367
Equity Value Per Share -6.99