Discounted Cash Flow (DCF) Analysis Unlevered
AAR Corp. (AIR)
$51.68
-0.56 (-1.07%)
All numbers are in Millions, Currency in USD
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 | 1,748.30 | 2,051.80 | 2,072 | 1,652.30 | 1,820 | 1,857.48 | 1,895.74 | 1,934.78 | 1,974.63 | 2,015.29 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 67.60 | 64.70 | 63 | 95.30 | 140.80 | 87.54 | 89.34 | 91.18 | 93.06 | 94.98 |
| EBITDA (%) | ||||||||||
| EBIT | 27.10 | 21.90 | 19.30 | 59 | 107.70 | 48.43 | 49.43 | 50.45 | 51.49 | 52.55 |
| EBIT (%) | ||||||||||
| Depreciation | 40.50 | 42.80 | 43.70 | 36.30 | 33.10 | 39.11 | 39.91 | 40.74 | 41.57 | 42.43 |
| 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 | 31.10 | 21.30 | 404.70 | 51.80 | 53.50 | 105.59 | 107.77 | 109.99 | 112.25 | 114.56 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 202 | 257 | 221.20 | 238.60 | 287.60 | 241.47 | 246.44 | 251.51 | 256.69 | 261.98 |
| Account Receivables (%) | ||||||||||
| Inventories | 460.70 | 523.70 | 623.10 | 540.60 | 550.50 | 538.35 | 549.43 | 560.75 | 572.30 | 584.08 |
| Inventories (%) | ||||||||||
| Accounts Payable | 170 | 187.80 | 191.60 | 127.20 | 156.40 | 165 | 168.40 | 171.87 | 175.41 | 179.02 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -22 | -17.40 | -23.60 | -11.30 | -17.30 | -18.13 | -18.50 | -18.88 | -19.27 | -19.67 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 51.68 |
|---|---|
| Beta | 1.575 |
| Diluted Shares Outstanding | 36 |
| Cost of Debt | |
| Tax Rate | 25.12 |
| After-tax Cost of Debt | 1.15% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 11.074 |
| Total Debt | 156.30 |
| Total Equity | 1,860.48 |
| Total Capital | 2,016.78 |
| Debt Weighting | 7.75 |
| Equity Weighting | 92.25 |
| 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 | 1,748.30 | 2,051.80 | 2,072 | 1,652.30 | 1,820 | 1,857.48 | 1,895.74 | 1,934.78 | 1,974.63 | 2,015.29 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 67.60 | 64.70 | 63 | 95.30 | 140.80 | 87.54 | 89.34 | 91.18 | 93.06 | 94.98 |
| EBIT | 27.10 | 21.90 | 19.30 | 59 | 107.70 | 48.43 | 49.43 | 50.45 | 51.49 | 52.55 |
| Tax Rate | 79.79% | 91.57% | 85.53% | 44.50% | 25.12% | 65.30% | 65.30% | 65.30% | 65.30% | 65.30% |
| EBIAT | 5.48 | 1.85 | 2.79 | 32.75 | 80.65 | 16.81 | 17.15 | 17.50 | 17.87 | 18.23 |
| Depreciation | 40.50 | 42.80 | 43.70 | 36.30 | 33.10 | 39.11 | 39.91 | 40.74 | 41.57 | 42.43 |
| Accounts Receivable | - | -55 | 35.80 | -17.40 | -49 | 46.13 | -4.97 | -5.08 | -5.18 | -5.29 |
| Inventories | - | -63 | -99.40 | 82.50 | -9.90 | 12.15 | -11.09 | -11.32 | -11.55 | -11.79 |
| Accounts Payable | - | 17.80 | 3.80 | -64.40 | 29.20 | 8.60 | 3.40 | 3.47 | 3.54 | 3.61 |
| Capital Expenditure | -22 | -17.40 | -23.60 | -11.30 | -17.30 | -18.13 | -18.50 | -18.88 | -19.27 | -19.67 |
| UFCF | 23.98 | -72.95 | -36.91 | 58.45 | 66.75 | 104.68 | 25.90 | 26.44 | 26.98 | 27.54 |
| WACC | ||||||||||
| PV UFCF | 94.90 | 21.29 | 19.70 | 18.23 | 16.87 | |||||
| SUM PV UFCF | 170.98 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 10.30 |
| Free cash flow (t + 1) | 28.09 |
| Terminal Value | 338.38 |
| Present Value of Terminal Value | 207.27 |
Intrinsic Value
| Enterprise Value | 378.25 |
|---|---|
| Net Debt | 102.80 |
| Equity Value | 275.45 |
| Shares Outstanding | 36 |
| Equity Value Per Share | 7.65 |