Discounted Cash Flow (DCF) Analysis Levered

W.W. Grainger, Inc. (GWW)

$479.115

+9.85 (+2.10%)

All numbers are in Millions, Currency in USD

Stock DCF: 319.39 | 479.115 | overvalue

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	10,424.86	11,221	11,486	11,797	13,022	13,773.70	14,568.80	15,409.79	16,299.33	17,240.22
Revenue (%)
Operating Cash Flow	1,056.56	1,057	1,042	1,123	937	1,249.04	1,321.15	1,397.41	1,478.08	1,563.40
Operating Cash Flow (%)
Capital Expenditure	-237.28	-239	-221	-197	-255	-274.32	-290.16	-306.91	-324.63	-343.37
Capital Expenditure (%)
Free Cash Flow	819.27	818	821	926	682	974.72	1,030.99	1,090.50	1,153.45	1,220.03

Weighted Average Cost Of Capital

Share price	$ 479.115
Beta	1.192
Diluted Shares Outstanding	52.20
Cost of Debt
Tax Rate	29.76
After-tax Cost of Debt	2.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.380
Total Debt	2,762
Total Equity	25,009.80
Total Capital	27,771.80
Debt Weighting	9.95
Equity Weighting	90.05
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	10,424.86	11,221	11,486	11,797	13,022	13,773.70	14,568.80	15,409.79	16,299.33	17,240.22
Operating Cash Flow	1,056.56	1,057	1,042	1,123	937	1,249.04	1,321.15	1,397.41	1,478.08	1,563.40
Capital Expenditure	-237.28	-239	-221	-197	-255	-274.32	-290.16	-306.91	-324.63	-343.37
Free Cash Flow	819.27	818	821	926	682	974.72	1,030.99	1,090.50	1,153.45	1,220.03
WACC
PV LFCF						904.44	887.68	871.23	855.08	839.23
SUM PV LFCF										4,357.66

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.77
Free cash flow (t + 1)	1,244.43
Terminal Value	21,567.30
Present Value of Terminal Value	14,835.64

Intrinsic Value

Enterprise Value	19,193.31
Net Debt	2,521
Equity Value	16,672.31
Shares Outstanding	52.20
Equity Value Per Share	319.39