Discounted Cash Flow (DCF) Analysis Levered

Sun Life Financial Inc. (SLF.TO)

$61.92

+0.83 (+1.36%)

All numbers are in Millions, Currency in USD

Stock DCF: 133.01 | 61.92 | 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	29,334	26,997	39,679	43,337	35,755	38,502.08	41,460.22	44,645.64	48,075.79	51,769.48
Revenue (%)
Operating Cash Flow	1,984	3,834	2,547	7,253	-1,857	2,997.52	3,227.82	3,475.81	3,742.86	4,030.43
Operating Cash Flow (%)
Capital Expenditure	-182	-85	-114	-158	-81	-139.66	-150.39	-161.95	-174.39	-187.79
Capital Expenditure (%)
Free Cash Flow	1,802	3,749	2,433	7,095	-1,938	2,857.85	3,077.42	3,313.86	3,568.47	3,842.64

Weighted Average Cost Of Capital

Share price	$ 61.92
Beta	0.953
Diluted Shares Outstanding	585
Cost of Debt
Tax Rate	14.26
After-tax Cost of Debt	2.74%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.359
Total Debt	10,207
Total Equity	36,223.20
Total Capital	46,430.20
Debt Weighting	21.98
Equity Weighting	78.02
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	29,334	26,997	39,679	43,337	35,755	38,502.08	41,460.22	44,645.64	48,075.79	51,769.48
Operating Cash Flow	1,984	3,834	2,547	7,253	-1,857	2,997.52	3,227.82	3,475.81	3,742.86	4,030.43
Capital Expenditure	-182	-85	-114	-158	-81	-139.66	-150.39	-161.95	-174.39	-187.79
Free Cash Flow	1,802	3,749	2,433	7,095	-1,938	2,857.85	3,077.42	3,313.86	3,568.47	3,842.64
WACC
PV LFCF						2,687.47	2,721.41	2,755.78	2,790.59	2,825.83
SUM PV LFCF										13,781.07

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.34
Free cash flow (t + 1)	3,919.49
Terminal Value	90,310.81
Present Value of Terminal Value	66,413.52

Intrinsic Value

Enterprise Value	80,194.59
Net Debt	2,381
Equity Value	77,813.59
Shares Outstanding	585
Equity Value Per Share	133.01