Discounted Cash Flow (DCF) Analysis Levered

Rio Tinto Group (RIO)

$73.42

-1.29 (-1.73%)
All numbers are in Millions, Currency in USD
Stock DCF: 322.92 | 73.42 | 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 40,03040,52243,16544,61163,49571,976.6281,591.2292,490.13104,844.90118,850.02
Revenue (%)
Operating Cash Flow 13,88411,82114,91215,87525,34525,034.0828,378.1232,168.8536,465.9441,337.04
Operating Cash Flow (%)
Capital Expenditure -4,482-5,430-5,488-6,189-7,384-9,042.17-10,250.02-11,619.21-13,171.30-14,930.71
Capital Expenditure (%)
Free Cash Flow 9,4026,3919,4249,68617,96115,991.9118,128.0920,549.6323,294.6426,406.33

Weighted Average Cost Of Capital

Share price $ 73.42
Beta 0.683
Diluted Shares Outstanding 1,630.10
Cost of Debt
Tax Rate 31.59
After-tax Cost of Debt 3.01%
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.843
Total Debt 13,531
Total Equity 119,681.94
Total Capital 133,212.94
Debt Weighting 10.16
Equity Weighting 89.84
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 40,03040,52243,16544,61163,49571,976.6281,591.2292,490.13104,844.90118,850.02
Operating Cash Flow 13,88411,82114,91215,87525,34525,034.0828,378.1232,168.8536,465.9441,337.04
Capital Expenditure -4,482-5,430-5,488-6,189-7,384-9,042.17-10,250.02-11,619.21-13,171.30-14,930.71
Free Cash Flow 9,4026,3919,4249,68617,96115,991.9118,128.0920,549.6323,294.6426,406.33
WACC
PV LFCF 15,022.9315,997.8217,035.9818,141.5119,318.78
SUM PV LFCF 85,517.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.45
Free cash flow (t + 1) 26,934.45
Terminal Value 605,268.63
Present Value of Terminal Value 442,812.46

Intrinsic Value

Enterprise Value 528,329.48
Net Debt 1,940
Equity Value 526,389.48
Shares Outstanding 1,630.10
Equity Value Per Share 322.92