Discounted Cash Flow (DCF) Analysis Levered

The Goodyear Tire & Rubber Company (GT)

$12.86

-0.46 (-3.45%)

All numbers are in Millions, Currency in USD

Stock DCF: 12.97 | 12.86 | undervalue

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	15,475	14,745	12,321	17,478	20,805	22,871.66	25,143.62	27,641.26	30,387	33,405.49
Revenue (%)
Operating Cash Flow	916	1,207	1,115	1,062	521	1,451.67	1,595.87	1,754.39	1,928.67	2,120.25
Operating Cash Flow (%)
Capital Expenditure	-811	-770	-647	-981	-1,061	-1,208.84	-1,328.92	-1,460.92	-1,606.05	-1,765.58
Capital Expenditure (%)
Free Cash Flow	105	437	468	81	-540	242.83	266.95	293.47	322.62	354.67

Weighted Average Cost Of Capital

Share price	$ 12.86
Beta	1.798
Diluted Shares Outstanding	234
Cost of Debt
Tax Rate	49.37
After-tax Cost of Debt	2.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.232
Total Debt	8,910
Total Equity	3,009.24
Total Capital	11,919.24
Debt Weighting	74.75
Equity Weighting	25.25
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	15,475	14,745	12,321	17,478	20,805	22,871.66	25,143.62	27,641.26	30,387	33,405.49
Operating Cash Flow	916	1,207	1,115	1,062	521	1,451.67	1,595.87	1,754.39	1,928.67	2,120.25
Capital Expenditure	-811	-770	-647	-981	-1,061	-1,208.84	-1,328.92	-1,460.92	-1,606.05	-1,765.58
Free Cash Flow	105	437	468	81	-540	242.83	266.95	293.47	322.62	354.67
WACC
PV LFCF						231.27	242.13	253.51	265.42	277.89
SUM PV LFCF										1,270.22

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.00
Free cash flow (t + 1)	361.76
Terminal Value	12,058.72
Present Value of Terminal Value	9,448.32

Intrinsic Value

Enterprise Value	10,718.54
Net Debt	7,683
Equity Value	3,035.54
Shares Outstanding	234
Equity Value Per Share	12.97