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	7,119.70	7,009.40	8,190.50	8,550.60	9,112.02	9,710.30	10,347.87	11,027.29	11,751.33	12,522.90
Revenue (%)
EBITDA	1,233.30	1,590.40	1,719.30	1,667.90	1,834.01	1,954.43	2,082.75	2,219.50	2,365.23	2,520.53
EBITDA (%)
EBIT	758.90	1,028	1,153	1,068.30	1,182.20	1,259.82	1,342.54	1,430.69	1,524.63	1,624.73
EBIT (%)
Depreciation	474.40	562.40	566.30	599.60	651.81	694.61	740.21	788.82	840.61	895.80
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	604.80	664.60	402.60	342.30	1,549.90	852.65	908.63	968.29	1,031.87	1,099.62
Total Cash (%)
Account Receivables	5,891.70	6,893.10	12,393	16,408.90	3,526.50	10,933.94	11,651.85	12,416.90	13,232.17	14,100.98
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	6,348.50	7,784.60	13,845.60	18,698.20	13,393.51	14,272.91	15,210.05	16,208.72	17,272.96	18,407.08
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	7,119.70	7,009.40	8,190.50	8,550.60	9,112.02	9,710.30	10,347.87	11,027.29	11,751.33	12,522.90
EBITDA	1,233.30	1,590.40	1,719.30	1,667.90	1,834.01	1,954.43	2,082.75	2,219.50	2,365.23	2,520.53
EBIT	758.90	1,028	1,153	1,068.30	1,182.20	1,259.82	1,342.54	1,430.69	1,524.63	1,624.73
Tax Rate	-6.82%	5.98%	7.00%	16.04%	5.55%	5.55%	5.55%	5.55%	5.55%	5.55%
EBIAT	810.66	966.50	1,072.24	896.99	1,116.58	1,189.89	1,268.02	1,351.28	1,440	1,534.55
Depreciation	474.40	562.40	566.30	599.60	651.81	694.61	740.21	788.82	840.61	895.80
Accounts Receivable	-	-1,001.40	-5,499.90	-4,015.90	12,882.40	-7,407.44	-717.91	-765.04	-815.28	-868.81
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	1,436.10	6,061	4,852.60	-5,304.69	879.40	937.14	998.67	1,064.24	1,134.12
Capital Expenditure	-138.80	-99.30	-128.60	-182.70	-161.12	-171.70	-182.98	-194.99	-207.79	-221.44
UFCF	1,146.26	1,864.30	2,071.04	2,150.59	9,184.98	-4,815.25	2,044.49	2,178.73	2,321.78	2,474.22
WACC
PV UFCF					9,184.98	-4,500.65	1,786.07	1,778.99	1,771.94	1,764.91
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