Discounted Cash Flow (DCF) Analysis Levered

Meritor, Inc. (MTOR)

$36.09

+0.15 (+0.42%)

All numbers are in Millions, Currency in USD

Stock DCF: 17.17 | 36.09 | 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	3,347	4,178	4,388	3,044	3,833	4,073.96	4,330.06	4,602.26	4,891.58	5,199.08
Revenue (%)
Operating Cash Flow	176	251	256	265	197	252.14	267.99	284.84	302.74	321.78
Operating Cash Flow (%)
Capital Expenditure	-95	-104	-103	-85	-90	-104.42	-110.98	-117.96	-125.37	-133.26
Capital Expenditure (%)
Free Cash Flow	81	147	153	180	107	147.72	157.01	166.88	177.37	188.52

Weighted Average Cost Of Capital

Share price	$ 36.09
Beta	1.754
Diluted Shares Outstanding	72.80
Cost of Debt
Tax Rate	14.96
After-tax Cost of Debt	6.54%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.068
Total Debt	1,027
Total Equity	2,627.35
Total Capital	3,654.35
Debt Weighting	28.10
Equity Weighting	71.90
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	3,347	4,178	4,388	3,044	3,833	4,073.96	4,330.06	4,602.26	4,891.58	5,199.08
Operating Cash Flow	176	251	256	265	197	252.14	267.99	284.84	302.74	321.78
Capital Expenditure	-95	-104	-103	-85	-90	-104.42	-110.98	-117.96	-125.37	-133.26
Free Cash Flow	81	147	153	180	107	147.72	157.01	166.88	177.37	188.52
WACC
PV LFCF						122.53	118.61	114.81	111.14	107.58
SUM PV LFCF										630.99

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.80
Free cash flow (t + 1)	192.29
Terminal Value	2,465.26
Present Value of Terminal Value	1,544.72

Intrinsic Value

Enterprise Value	2,175.71
Net Debt	926
Equity Value	1,249.71
Shares Outstanding	72.80
Equity Value Per Share	17.17