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 6,9347,1957,003.608,209.408,550.609,031.089,538.5610,074.5510,640.6611,238.59
Revenue (%)
EBITDA 1,0561,310.901,563.902,039.102,349.501,952.432,062.142,178.022,300.412,429.67
EBITDA (%)
EBIT 637836.501,001.501,472.801,749.901,327.901,402.511,481.331,564.561,652.48
EBIT (%)
Depreciation 419474.40562.40566.30599.60624.53659.63696.69735.84777.19
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 607.20604.80664.60402.60342.30642.28678.37716.49756.75799.28
Total Cash (%)
Account Receivables 4,857.505,419.206,43611,753.1016,408.9010,337.6610,918.5511,532.0912,180.1112,864.54
Account Receivables (%)
Inventories 1,629.602,019.102,909.704,063.704,621.903,552.183,751.783,962.604,185.274,420.45
Inventories (%)
Accounts Payable 5,740.206,348.507,784.6013,845.6018,698.2012,092.6512,772.1713,489.8714,247.8915,048.52
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 6,9347,1957,003.608,209.408,550.609,031.089,538.5610,074.5510,640.6611,238.59
EBITDA 1,0561,310.901,563.902,039.102,349.501,952.432,062.142,178.022,300.412,429.67
EBIT 637836.501,001.501,472.801,749.901,327.901,402.511,481.331,564.561,652.48
Tax Rate -32.14%-6.82%5.98%7.00%16.04%-1.99%-1.99%-1.99%-1.99%-1.99%
EBIAT 841.76893.55941.591,369.641,469.281,354.301,430.401,510.781,595.671,685.34
Depreciation 419474.40562.40566.30599.60624.53659.63696.69735.84777.19
Accounts Receivable --561.70-1,016.80-5,317.10-4,655.806,071.24-580.90-613.54-648.02-684.43
Inventories --389.50-890.60-1,154-558.201,069.72-199.61-210.82-222.67-235.18
Accounts Payable -608.301,436.106,0614,852.60-6,605.55679.51717.70758.03800.62
Capital Expenditure -124.40-138.80-99.30-128.60-182.70-159.75-168.72-178.20-188.22-198.79
UFCF 1,136.36886.25933.391,397.241,524.782,354.511,820.321,922.612,030.642,144.75
WACC
PV UFCF 2,209.151,602.491,588.051,573.731,559.54
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