Discounted Cash Flow (DCF) Analysis Levered

Merck & Co., Inc. (MRK)

$124.05

-2.91 (-2.29%)
All numbers are in Millions, Currency in USD
Stock DCF: 140.13 | 124.05 | undervalue

Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 46,84047,99448,70459,28360,11564,182.9168,526.0973,163.1678,114.0283,399.90
Revenue (%)
Operating Cash Flow 13,44010,25314,10919,09516,717.2717,848.5119,056.3020,345.8121,722.5923,192.53
Operating Cash Flow (%)
Capital Expenditure -3,473-4,684-4,448-4,388-5,065.99-5,408.80-5,774.81-6,165.58-6,582.80-7,028.25
Capital Expenditure (%)
Free Cash Flow 9,9675,5699,66114,70711,651.2812,439.7113,281.4914,180.2315,139.7916,164.28

Weighted Average Cost Of Capital

Share price $ 124.05
Beta 0.384
Diluted Shares Outstanding 2,547
Cost of Debt
Tax Rate 80.68
After-tax Cost of Debt 0.97%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.022
Total Debt -
Total Equity 315,955.35
Total Capital 315,955.35
Debt Weighting 0.00
Equity Weighting 100.00
Wacc

Build Up Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 46,84047,99448,70459,28360,11564,182.9168,526.0973,163.1678,114.0283,399.90
Operating Cash Flow 13,44010,25314,10919,09516,717.2717,848.5119,056.3020,345.8121,722.5923,192.53
Capital Expenditure -3,473-4,684-4,448-4,388-5,065.99-5,408.80-5,774.81-6,165.58-6,582.80-7,028.25
Free Cash Flow 9,9675,5699,66114,70711,651.2812,439.7113,281.4914,180.2315,139.7916,164.28
WACC
PV LFCF 11,733.3611,816.0211,899.2611,983.0912,067.50
SUM PV LFCF 59,499.24

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.02
Free cash flow (t + 1) 16,487.57
Terminal Value 410,138.54
Present Value of Terminal Value 306,190.41

Intrinsic Value

Enterprise Value 365,689.64
Net Debt 8,773
Equity Value 356,916.64
Shares Outstanding 2,547
Equity Value Per Share 140.13