Discounted Cash Flow (DCF) Analysis Unlevered

Arthur J. Gallagher & Co. (AJG)

$230.33

-0.60 (-0.26%)

All numbers are in Millions, Currency in USD

Stock DCF: 179.37 | 230.33 | 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	6,934	7,195	7,003.60	8,209.40	8,550.60	9,031.08	9,538.56	10,074.55	10,640.66	11,238.59
Revenue (%)
EBITDA	1,056	1,310.90	1,563.90	2,039.10	2,349.50	1,952.43	2,062.14	2,178.02	2,300.41	2,429.67
EBITDA (%)
EBIT	637	836.50	1,001.50	1,472.80	1,749.90	1,327.90	1,402.51	1,481.33	1,564.56	1,652.48
EBIT (%)
Depreciation	419	474.40	562.40	566.30	599.60	624.53	659.63	696.69	735.84	777.19
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	607.20	604.80	664.60	402.60	342.30	642.28	678.37	716.49	756.75	799.28
Total Cash (%)
Account Receivables	4,857.50	5,419.20	6,436	11,753.10	16,408.90	10,337.66	10,918.55	11,532.09	12,180.11	12,864.54
Account Receivables (%)
Inventories	1,629.60	2,019.10	2,909.70	4,063.70	4,621.90	3,552.18	3,751.78	3,962.60	4,185.27	4,420.45
Inventories (%)
Accounts Payable	5,740.20	6,348.50	7,784.60	13,845.60	18,698.20	12,092.65	12,772.17	13,489.87	14,247.89	15,048.52
Accounts Payable (%)
Capital Expenditure	-124.40	-138.80	-99.30	-128.60	-182.70	-159.75	-168.72	-178.20	-188.22	-198.79
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 230.33
Beta	0.696
Diluted Shares Outstanding	207.35
Cost of Debt
Tax Rate	16.04
After-tax Cost of Debt	-3.36%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.913
Total Debt	6,415.10
Total Equity	47,758
Total Capital	54,173.10
Debt Weighting	11.84
Equity Weighting	88.16
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	6,934	7,195	7,003.60	8,209.40	8,550.60	9,031.08	9,538.56	10,074.55	10,640.66	11,238.59
EBITDA	1,056	1,310.90	1,563.90	2,039.10	2,349.50	1,952.43	2,062.14	2,178.02	2,300.41	2,429.67
EBIT	637	836.50	1,001.50	1,472.80	1,749.90	1,327.90	1,402.51	1,481.33	1,564.56	1,652.48
Tax Rate	-32.14%	-6.82%	5.98%	7.00%	16.04%	-1.99%	-1.99%	-1.99%	-1.99%	-1.99%
EBIAT	841.76	893.55	941.59	1,369.64	1,469.28	1,354.30	1,430.40	1,510.78	1,595.67	1,685.34
Depreciation	419	474.40	562.40	566.30	599.60	624.53	659.63	696.69	735.84	777.19
Accounts Receivable	-	-561.70	-1,016.80	-5,317.10	-4,655.80	6,071.24	-580.90	-613.54	-648.02	-684.43
Inventories	-	-389.50	-890.60	-1,154	-558.20	1,069.72	-199.61	-210.82	-222.67	-235.18
Accounts Payable	-	608.30	1,436.10	6,061	4,852.60	-6,605.55	679.51	717.70	758.03	800.62
Capital Expenditure	-124.40	-138.80	-99.30	-128.60	-182.70	-159.75	-168.72	-178.20	-188.22	-198.79
UFCF	1,136.36	886.25	933.39	1,397.24	1,524.78	2,354.51	1,820.32	1,922.61	2,030.64	2,144.75
WACC
PV UFCF						2,209.15	1,602.49	1,588.05	1,573.73	1,559.54
SUM PV UFCF										8,532.96

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.58
Free cash flow (t + 1)	2,187.64
Terminal Value	47,765.14
Present Value of Terminal Value	34,732.21

Intrinsic Value

Enterprise Value	43,265.17
Net Debt	6,072.80
Equity Value	37,192.37
Shares Outstanding	207.35
Equity Value Per Share	179.37