Discounted Cash Flow (DCF) Analysis Levered

KeyCorp (KEY)

$17.83

+0.83 (+4.88%)

All numbers are in Millions, Currency in USD

Stock DCF: 45.76 | 17.83 | 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	6,063	6,157	6,180	6,490	7,038	7,308.68	7,589.77	7,881.67	8,184.80	8,499.58
Revenue (%)
Operating Cash Flow	1,815	2,506	2,906	1,673	1,153	2,336.15	2,426	2,519.31	2,616.20	2,716.82
Operating Cash Flow (%)
Capital Expenditure	-112	-99	-85	-63	-66	-98.51	-102.30	-106.23	-110.32	-114.56
Capital Expenditure (%)
Free Cash Flow	1,703	2,407	2,821	1,610	1,087	2,237.65	2,323.71	2,413.08	2,505.88	2,602.26

Weighted Average Cost Of Capital

Share price	$ 17.83
Beta	1.331
Diluted Shares Outstanding	974.81
Cost of Debt
Tax Rate	19.33
After-tax Cost of Debt	1.89%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.408
Total Debt	12,630
Total Equity	17,380.81
Total Capital	30,010.81
Debt Weighting	42.08
Equity Weighting	57.92
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	6,063	6,157	6,180	6,490	7,038	7,308.68	7,589.77	7,881.67	8,184.80	8,499.58
Operating Cash Flow	1,815	2,506	2,906	1,673	1,153	2,336.15	2,426	2,519.31	2,616.20	2,716.82
Capital Expenditure	-112	-99	-85	-63	-66	-98.51	-102.30	-106.23	-110.32	-114.56
Free Cash Flow	1,703	2,407	2,821	1,610	1,087	2,237.65	2,323.71	2,413.08	2,505.88	2,602.26
WACC
PV LFCF						2,106.22	2,058.76	2,012.36	1,967.02	1,922.69
SUM PV LFCF										10,067.05

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.24
Free cash flow (t + 1)	2,654.30
Terminal Value	62,601.47
Present Value of Terminal Value	46,253.46

Intrinsic Value

Enterprise Value	56,320.51
Net Debt	11,717
Equity Value	44,603.51
Shares Outstanding	974.81
Equity Value Per Share	45.76