Discounted Cash Flow (DCF) Analysis Unlevered

American Electric Power Company, In... (AEP)

$89.09

+3.68 (+4.31%)

All numbers are in Millions, Currency in USD

Stock DCF: 35.85 | 89.09 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	16,195.70	15,561.40	14,918.50	16,792	19,639.50	20,693.55	21,804.16	22,974.38	24,207.41	25,506.61
Revenue (%)
EBITDA	5,423.90	5,720.80	6,313.10	6,849.10	6,909.90	7,803.18	8,221.97	8,663.24	9,128.19	9,618.10
EBITDA (%)
EBIT	3,023.50	2,980.70	3,406.30	3,802.70	3,707.10	4,228.82	4,455.78	4,694.92	4,946.90	5,212.40
EBIT (%)
Depreciation	2,400.40	2,740.10	2,906.80	3,046.40	3,202.80	3,574.35	3,766.19	3,968.32	4,181.30	4,405.71
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	393.20	449.50	593.50	623.80	696.90	685.29	722.07	760.82	801.65	844.68
Total Cash (%)
Account Receivables	1,926.50	1,705.10	2,028	2,063.10	1,207.40	2,271.33	2,393.24	2,521.68	2,657.02	2,799.62
Account Receivables (%)
Inventories	921.10	1,169.20	1,310	989.20	888.90	1,340.89	1,412.86	1,488.68	1,568.58	1,652.77
Inventories (%)
Accounts Payable	1,874.30	2,085.80	1,709.70	2,054.60	2,613	2,565.06	2,702.72	2,847.77	3,000.61	3,161.66
Accounts Payable (%)
Capital Expenditure	-6,357	-6,143.70	-6,316	-5,764.10	-100.70	-6,452.56	-6,798.86	-7,163.75	-7,548.23	-7,953.34
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 89.09
Beta	0.437
Diluted Shares Outstanding	513.48
Cost of Debt
Tax Rate	4.74
After-tax Cost of Debt	3.35%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.444
Total Debt	39,650.30
Total Equity	45,746.34
Total Capital	85,396.64
Debt Weighting	46.43
Equity Weighting	53.57
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	16,195.70	15,561.40	14,918.50	16,792	19,639.50	20,693.55	21,804.16	22,974.38	24,207.41	25,506.61
EBITDA	5,423.90	5,720.80	6,313.10	6,849.10	6,909.90	7,803.18	8,221.97	8,663.24	9,128.19	9,618.10
EBIT	3,023.50	2,980.70	3,406.30	3,802.70	3,707.10	4,228.82	4,455.78	4,694.92	4,946.90	5,212.40
Tax Rate	2.52%	-4.70%	-2.52%	0.95%	4.74%	0.20%	0.20%	0.20%	0.20%	0.20%
EBIAT	2,947.36	3,120.90	3,492.01	3,766.67	3,531.27	4,220.46	4,446.97	4,685.63	4,937.11	5,202.08
Depreciation	2,400.40	2,740.10	2,906.80	3,046.40	3,202.80	3,574.35	3,766.19	3,968.32	4,181.30	4,405.71
Accounts Receivable	-	221.40	-322.90	-35.10	855.70	-1,063.93	-121.90	-128.44	-135.34	-142.60
Inventories	-	-248.10	-140.80	320.80	100.30	-451.99	-71.97	-75.83	-79.90	-84.19
Accounts Payable	-	211.50	-376.10	344.90	558.40	-47.94	137.67	145.05	152.84	161.04
Capital Expenditure	-6,357	-6,143.70	-6,316	-5,764.10	-100.70	-6,452.56	-6,798.86	-7,163.75	-7,548.23	-7,953.34
UFCF	-1,009.24	-97.90	-756.99	1,679.57	8,147.77	-221.62	1,358.09	1,430.98	1,507.78	1,588.70
WACC
PV UFCF						-212.13	1,244.36	1,255.04	1,265.82	1,276.69
SUM PV UFCF										4,829.78

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.47
Free cash flow (t + 1)	1,620.48
Terminal Value	65,606.37
Present Value of Terminal Value	52,721.53

Intrinsic Value

Enterprise Value	57,551.31
Net Debt	39,140.90
Equity Value	18,410.41
Shares Outstanding	513.48
Equity Value Per Share	35.85