Discounted Cash Flow (DCF) Analysis Levered

Humana Inc. (HUM)

$476.57

-13.20 (-2.70%)
All numbers are in Millions, Currency in USD
Stock DCF: 1,042.19 | 476.57 | undervalue

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 53,76756,91264,88877,15583,06492,705.12103,465.27115,474.33128,877.27143,835.87
Revenue (%)
Operating Cash Flow 4,0512,1735,2845,6392,2625,474.736,110.186,819.377,610.898,494.27
Operating Cash Flow (%)
Capital Expenditure -526-612-736-964-1,316-1,116.48-1,246.06-1,390.69-1,552.11-1,732.26
Capital Expenditure (%)
Free Cash Flow 3,5251,5614,5484,6759464,358.254,864.115,428.686,058.786,762.01

Weighted Average Cost Of Capital

Share price $ 476.57
Beta 0.740
Diluted Shares Outstanding 129.40
Cost of Debt
Tax Rate 12.55
After-tax Cost of Debt 2.22%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.025
Total Debt 12,820
Total Equity 61,666.25
Total Capital 74,486.25
Debt Weighting 17.21
Equity Weighting 82.79
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 53,76756,91264,88877,15583,06492,705.12103,465.27115,474.33128,877.27143,835.87
Operating Cash Flow 4,0512,1735,2845,6392,2625,474.736,110.186,819.377,610.898,494.27
Capital Expenditure -526-612-736-964-1,316-1,116.48-1,246.06-1,390.69-1,552.11-1,732.26
Free Cash Flow 3,5251,5614,5484,6759464,358.254,864.115,428.686,058.786,762.01
WACC
PV LFCF 4,103.824,312.754,532.324,763.075,005.57
SUM PV LFCF 22,717.54

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.20
Free cash flow (t + 1) 6,897.26
Terminal Value 164,220.36
Present Value of Terminal Value 121,563.84

Intrinsic Value

Enterprise Value 144,281.38
Net Debt 9,426
Equity Value 134,855.38
Shares Outstanding 129.40
Equity Value Per Share 1,042.19