Discounted Cash Flow (DCF) Analysis Levered

The Gap, Inc. (GPS)

$14.825

-0.44 (-2.85%)
All numbers are in Millions, Currency in USD
Stock DCF: 8.05 | 14.825 | 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 15,85516,58016,38313,80016,67017,020.7117,378.7917,744.4118,117.7218,498.88
Revenue (%)
Operating Cash Flow 1,3801,3811,4112371,140.361,164.351,188.851,213.861,239.401,265.47
Operating Cash Flow (%)
Capital Expenditure -731-705-1,045-392-753.56-769.41-785.60-802.13-819-836.23
Capital Expenditure (%)
Free Cash Flow 649676366-155386.80394.94403.25411.73420.39429.24

Weighted Average Cost Of Capital

Share price $ 14.825
Beta 1.888
Diluted Shares Outstanding 383
Cost of Debt
Tax Rate 20.74
After-tax Cost of Debt 1.13%
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.528
Total Debt 11,752
Total Equity 5,677.98
Total Capital 17,429.97
Debt Weighting 67.42
Equity Weighting 32.58
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 15,85516,58016,38313,80016,67017,020.7117,378.7917,744.4118,117.7218,498.88
Operating Cash Flow 1,3801,3811,4112371,140.361,164.351,188.851,213.861,239.401,265.47
Capital Expenditure -731-705-1,045-392-753.56-769.41-785.60-802.13-819-836.23
Free Cash Flow 649676366-155386.80394.94403.25411.73420.39429.24
WACC
PV LFCF 297.42289.66282.10274.73267.56
SUM PV LFCF 1,787.75

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.84
Free cash flow (t + 1) 437.82
Terminal Value 15,416.29
Present Value of Terminal Value 12,171.52

Intrinsic Value

Enterprise Value 13,959.27
Net Debt 10,875
Equity Value 3,084.27
Shares Outstanding 383
Equity Value Per Share 8.05