Discounted Cash Flow (DCF) Analysis Unlevered

Arthur J. Gallagher & Co. (AJG)

$206.09

+0.41 (+0.20%)
All numbers are in Millions, Currency in USD
Stock DCF: 189.25 | 206.09 | overvalue

Operating Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 7,119.707,009.408,190.508,550.609,112.029,710.3010,347.8711,027.2911,751.3312,522.90
Revenue (%)
EBITDA 1,233.301,590.401,719.301,667.901,834.011,954.432,082.752,219.502,365.232,520.53
EBITDA (%)
EBIT 758.901,0281,1531,068.301,182.201,259.821,342.541,430.691,524.631,624.73
EBIT (%)
Depreciation 474.40562.40566.30599.60651.81694.61740.21788.82840.61895.80
Depreciation (%)

Balance Sheet Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Total Cash 604.80664.60402.60342.301,549.90852.65908.63968.291,031.871,099.62
Total Cash (%)
Account Receivables 5,891.706,893.1012,39316,408.903,526.5010,933.9411,651.8512,416.9013,232.1714,100.98
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 6,348.507,784.6013,845.6018,698.2013,393.5114,272.9115,210.0516,208.7217,272.9618,407.08
Accounts Payable (%)
Capital Expenditure -138.80-99.30-128.60-182.70-161.12-171.70-182.98-194.99-207.79-221.44
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 206.09
Beta 0.701
Diluted Shares Outstanding 207.35
Cost of Debt
Tax Rate 16.04
After-tax Cost of Debt 4.20%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.051
Total Debt 986.40
Total Equity 42,731.94
Total Capital 43,718.34
Debt Weighting 2.26
Equity Weighting 97.74
Wacc

Build Up Free Cash

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 7,119.707,009.408,190.508,550.609,112.029,710.3010,347.8711,027.2911,751.3312,522.90
EBITDA 1,233.301,590.401,719.301,667.901,834.011,954.432,082.752,219.502,365.232,520.53
EBIT 758.901,0281,1531,068.301,182.201,259.821,342.541,430.691,524.631,624.73
Tax Rate -6.82%5.98%7.00%16.04%5.55%5.55%5.55%5.55%5.55%5.55%
EBIAT 810.66966.501,072.24896.991,116.581,189.891,268.021,351.281,4401,534.55
Depreciation 474.40562.40566.30599.60651.81694.61740.21788.82840.61895.80
Accounts Receivable --1,001.40-5,499.90-4,015.9012,882.40-7,407.44-717.91-765.04-815.28-868.81
Inventories ----------
Accounts Payable -1,436.106,0614,852.60-5,304.69879.40937.14998.671,064.241,134.12
Capital Expenditure -138.80-99.30-128.60-182.70-161.12-171.70-182.98-194.99-207.79-221.44
UFCF 1,146.261,864.302,071.042,150.599,184.98-4,815.252,044.492,178.732,321.782,474.22
WACC
PV UFCF 9,184.98-4,500.651,786.071,778.991,771.941,764.91
SUM PV UFCF 2,601.26

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.99
Free cash flow (t + 1) 2,523.71
Terminal Value 50,575.33
Present Value of Terminal Value 36,076.36

Intrinsic Value

Enterprise Value 38,677.62
Net Debt -563.50
Equity Value 39,241.12
Shares Outstanding 207.35
Equity Value Per Share 189.25