Discounted Cash Flow (DCF) Analysis Levered

Heartland Financial USA, Inc. (HTLF)

$31.43

-0.70 (-2.18%)

All numbers are in Millions, Currency in USD

Stock DCF: 111.68 | 31.43 | 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	520.91	569.36	606.92	688.91	727.55	791.24	860.50	935.83	1,017.76	1,106.85
Revenue (%)
Operating Cash Flow	242.75	161.17	190.37	153.15	388.01	287.75	312.94	340.34	370.13	402.54
Operating Cash Flow (%)
Capital Expenditure	-12.74	-17.93	-18.54	-19.86	-20.98	-22.81	-24.81	-26.98	-29.35	-31.91
Capital Expenditure (%)
Free Cash Flow	230.01	143.25	171.83	133.29	367.03	264.94	288.13	313.36	340.79	370.62

Weighted Average Cost Of Capital

Share price	$ 31.43
Beta	1.042
Diluted Shares Outstanding	42.48
Cost of Debt
Tax Rate	20.76
After-tax Cost of Debt	8.10%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.664
Total Debt	747.87
Total Equity	1,335.13
Total Capital	2,083
Debt Weighting	35.90
Equity Weighting	64.10
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	520.91	569.36	606.92	688.91	727.55	791.24	860.50	935.83	1,017.76	1,106.85
Operating Cash Flow	242.75	161.17	190.37	153.15	388.01	287.75	312.94	340.34	370.13	402.54
Capital Expenditure	-12.74	-17.93	-18.54	-19.86	-20.98	-22.81	-24.81	-26.98	-29.35	-31.91
Free Cash Flow	230.01	143.25	171.83	133.29	367.03	264.94	288.13	313.36	340.79	370.62
WACC
PV LFCF						162.75	163.19	163.64	164.08	164.53
SUM PV LFCF										1,228.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.46
Free cash flow (t + 1)	378.03
Terminal Value	5,851.91
Present Value of Terminal Value	3,898.97

Intrinsic Value

Enterprise Value	5,126.98
Net Debt	383.04
Equity Value	4,743.94
Shares Outstanding	42.48
Equity Value Per Share	111.68