Discounted Cash Flow (DCF) Analysis Levered

Zoetis Inc. (ZTS)

$174.3133

-0.37 (-0.21%)

All numbers are in Millions, Currency in USD

Stock DCF: 79.93 | 174.3133 | overvalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	5,825	6,260	6,675	7,776	8,080	8,776.92	9,533.95	10,356.28	11,249.54	12,219.84
Revenue (%)
Operating Cash Flow	1,790	1,795	2,126	2,213	1,912	2,516.81	2,733.89	2,969.70	3,225.84	3,504.08
Operating Cash Flow (%)
Capital Expenditure	-338	-460	-453	-477	-586	-584.97	-635.42	-690.23	-749.76	-814.43
Capital Expenditure (%)
Free Cash Flow	1,452	1,335	1,673	1,736	1,326	1,931.85	2,098.47	2,279.47	2,476.08	2,689.65

Weighted Average Cost Of Capital

Share price	$ 174.3,133
Beta	0.775
Diluted Shares Outstanding	470.38
Cost of Debt
Tax Rate	20.41
After-tax Cost of Debt	2.17%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.282
Total Debt	8,090
Total Equity	81,994.36
Total Capital	90,084.36
Debt Weighting	8.98
Equity Weighting	91.02
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	5,825	6,260	6,675	7,776	8,080	8,776.92	9,533.95	10,356.28	11,249.54	12,219.84
Operating Cash Flow	1,790	1,795	2,126	2,213	1,912	2,516.81	2,733.89	2,969.70	3,225.84	3,504.08
Capital Expenditure	-338	-460	-453	-477	-586	-584.97	-635.42	-690.23	-749.76	-814.43
Free Cash Flow	1,452	1,335	1,673	1,736	1,326	1,931.85	2,098.47	2,279.47	2,476.08	2,689.65
WACC
PV LFCF						1,793.23	1,808.13	1,823.16	1,838.31	1,853.58
SUM PV LFCF										9,116.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.73
Free cash flow (t + 1)	2,743.44
Terminal Value	47,878.59
Present Value of Terminal Value	32,995.75

Intrinsic Value

Enterprise Value	42,112.16
Net Debt	4,513
Equity Value	37,599.16
Shares Outstanding	470.38
Equity Value Per Share	79.93