Discounted Cash Flow (DCF) Analysis Levered

Illinois Tool Works Inc. (ITW)

$230.31

-1.74 (-0.75%)

All numbers are in Millions, Currency in USD

Stock DCF: 98.92 | 230.31 | overvalue

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	14,768	14,109	12,574	14,455	15,932	16,323.75	16,725.12	17,136.37	17,557.73	17,989.45
Revenue (%)
Operating Cash Flow	2,811	2,995	2,807	2,557	2,348	3,101.93	3,178.20	3,256.35	3,336.42	3,418.46
Operating Cash Flow (%)
Capital Expenditure	-364	-326	-236	-296	-412	-368.46	-377.52	-386.80	-396.31	-406.06
Capital Expenditure (%)
Free Cash Flow	2,447	2,669	2,571	2,261	1,936	2,733.47	2,800.68	2,869.55	2,940.11	3,012.40

Weighted Average Cost Of Capital

Share price	$ 230.31
Beta	1.158
Diluted Shares Outstanding	314.60
Cost of Debt
Tax Rate	21.03
After-tax Cost of Debt	2.06%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.037
Total Debt	7,763
Total Equity	72,455.53
Total Capital	80,218.53
Debt Weighting	9.68
Equity Weighting	90.32
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	14,768	14,109	12,574	14,455	15,932	16,323.75	16,725.12	17,136.37	17,557.73	17,989.45
Operating Cash Flow	2,811	2,995	2,807	2,557	2,348	3,101.93	3,178.20	3,256.35	3,336.42	3,418.46
Capital Expenditure	-364	-326	-236	-296	-412	-368.46	-377.52	-386.80	-396.31	-406.06
Free Cash Flow	2,447	2,669	2,571	2,261	1,936	2,733.47	2,800.68	2,869.55	2,940.11	3,012.40
WACC
PV LFCF						2,501.58	2,345.64	2,199.43	2,062.34	1,933.78
SUM PV LFCF										11,042.77

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.27
Free cash flow (t + 1)	3,072.65
Terminal Value	42,264.76
Present Value of Terminal Value	27,131.49

Intrinsic Value

Enterprise Value	38,174.26
Net Debt	7,055
Equity Value	31,119.26
Shares Outstanding	314.60
Equity Value Per Share	98.92