Discounted Cash Flow (DCF) Analysis Unlevered

Bread Financial Holdings, Inc. (ADS)

$56.8

+0.65 (+1.16%)
All numbers are in Millions, Currency in USD
Stock DCF: 536.08 | 56.8 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 7,719.407,791.205,581.304,521.403,6553,055.702,554.672,135.791,785.601,492.82
Revenue (%)
EBITDA 1,986.502,161.401,048.70605.501,171719.28601.35502.75420.31351.40
EBITDA (%)
EBIT 1,488.901,674.10799.40421.701,048568.96475.67397.67332.47277.96
EBIT (%)
Depreciation 497.60487.30249.30183.80123150.33125.68105.0787.8473.44
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 4,1903,863.103,874.403,719.603,1112,081.931,740.561,455.171,216.571,017.09
Total Cash (%)
Account Receivables 18,316.8017,740.6018,743.1015,160.2015,7189,571.348,001.976,689.925,5934,675.94
Account Receivables (%)
Inventories 234.10251.90218164.30126.15105.4688.1773.7161.6351.52
Inventories (%)
Accounts Payable 651.20558.30300.80328.20258.13215.81180.42150.84126.11105.43
Accounts Payable (%)
Capital Expenditure -225.40-199.8015.10-54-84-53.21-44.48-37.19-31.09-25.99
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 56.8
Beta 2.156
Diluted Shares Outstanding 47.90
Cost of Debt
Tax Rate 23.28
After-tax Cost of Debt 3.84%
Risk-Free Rate
Market Risk Premium
Cost of Equity 13.653
Total Debt 7,579
Total Equity 2,720.72
Total Capital 10,299.72
Debt Weighting 73.58
Equity Weighting 26.42
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 7,719.407,791.205,581.304,521.403,6553,055.702,554.672,135.791,785.601,492.82
EBITDA 1,986.502,161.401,048.70605.501,171719.28601.35502.75420.31351.40
EBIT 1,488.901,674.10799.40421.701,048568.96475.67397.67332.47277.96
Tax Rate 27.05%21.30%62.35%45.83%23.28%35.96%35.96%35.96%35.96%35.96%
EBIAT 1,086.201,317.58300.97228.43804.07364.36304.62254.67212.91178
Depreciation 497.60487.30249.30183.80123150.33125.68105.0787.8473.44
Accounts Receivable -576.20-1,002.503,582.90-557.806,146.661,569.371,312.051,096.92917.06
Inventories --17.8033.9053.7038.1520.6817.2914.4612.0910.10
Accounts Payable --92.90-257.5027.40-70.07-42.33-35.39-29.58-24.73-20.68
Capital Expenditure -225.40-199.8015.10-54-84-53.21-44.48-37.19-31.09-25.99
UFCF 1,358.402,070.58-660.734,022.23253.356,586.501,937.091,619.471,353.941,131.94
WACC
PV UFCF 6,188.571,710.101,343.331,055.22828.90
SUM PV UFCF 11,126.12

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.43
Free cash flow (t + 1) 1,154.58
Terminal Value 26,062.66
Present Value of Terminal Value 19,085.27

Intrinsic Value

Enterprise Value 30,211.39
Net Debt 4,533
Equity Value 25,678.39
Shares Outstanding 47.90
Equity Value Per Share 536.08