Discounted Cash Flow (DCF) Analysis Levered

Illinois Tool Works Inc. (ITW)

$207.07

-0.57 (-0.27%)

All numbers are in Millions, Currency in USD

Stock DCF: 119.33 | 207.07 | 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	14,314	14,768	14,109	12,574	14,455	14,555.80	14,657.29	14,759.50	14,862.42	14,966.06
Revenue (%)
Operating Cash Flow	2,402	2,811	2,995	2,807	2,557	2,825.45	2,845.16	2,865	2,884.97	2,905.09
Operating Cash Flow (%)
Capital Expenditure	-297	-364	-326	-236	-296	-313.67	-315.86	-318.06	-320.28	-322.52
Capital Expenditure (%)
Free Cash Flow	2,105	2,447	2,669	2,571	2,261	2,511.78	2,529.29	2,546.93	2,564.69	2,582.58

Weighted Average Cost Of Capital

Share price	$ 207.07
Beta	1.112
Diluted Shares Outstanding	314.60
Cost of Debt
Tax Rate	19.00
After-tax Cost of Debt	2.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.127
Total Debt	7,881
Total Equity	65,144.22
Total Capital	73,025.22
Debt Weighting	10.79
Equity Weighting	89.21
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	14,314	14,768	14,109	12,574	14,455	14,555.80	14,657.29	14,759.50	14,862.42	14,966.06
Operating Cash Flow	2,402	2,811	2,995	2,807	2,557	2,825.45	2,845.16	2,865	2,884.97	2,905.09
Capital Expenditure	-297	-364	-326	-236	-296	-313.67	-315.86	-318.06	-320.28	-322.52
Free Cash Flow	2,105	2,447	2,669	2,571	2,261	2,511.78	2,529.29	2,546.93	2,564.69	2,582.58
WACC
PV LFCF						2,337.19	2,189.90	2,051.90	1,922.59	1,801.43
SUM PV LFCF										10,303.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.47
Free cash flow (t + 1)	2,634.23
Terminal Value	48,157.71
Present Value of Terminal Value	33,591.52

Intrinsic Value

Enterprise Value	43,894.52
Net Debt	6,354
Equity Value	37,540.52
Shares Outstanding	314.60
Equity Value Per Share	119.33