Discounted Cash Flow (DCF) Analysis Unlevered

Arthur J. Gallagher & Co. (AJG)

$253.69

+0.52 (+0.21%)
All numbers are in Millions, Currency in USD
Stock DCF: 236.20 | 253.69 | overvalue

Operating Data

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 7,1957,003.608,209.408,550.6010,071.9010,991.0811,994.1413,088.7414,283.2415,586.75
Revenue (%)
EBITDA 1,310.901,563.902,039.102,349.502,555.602,599.152,836.363,095.213,377.683,685.93
EBITDA (%)
EBIT 836.501,001.501,472.801,749.901,859.101,819.901,985.992,167.232,365.012,580.85
EBIT (%)
Depreciation 474.40562.40566.30599.60696.50779.26850.37927.981,012.671,105.08
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 604.80664.60402.60342.30971.50801.21874.33954.121,041.201,136.22
Total Cash (%)
Account Receivables 5,419.206,43611,753.1016,408.903,786.6011,867.7312,950.8014,132.7115,422.4816,829.96
Account Receivables (%)
Inventories 2,019.102,909.704,063.704,621.9027,0779,716.1010,602.8111,570.4412,626.3713,778.67
Inventories (%)
Accounts Payable 6,348.507,784.6013,845.6018,698.202,553.1013,454.5614,682.4516,022.3917,484.6219,080.29
Accounts Payable (%)
Capital Expenditure -138.80-99.30-128.60-182.70-193.60-197.23-215.23-234.87-256.31-279.70
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 253.69
Beta 0.684
Diluted Shares Outstanding 219.30
Cost of Debt
Tax Rate 18.19
After-tax Cost of Debt 3.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.584
Total Debt 8,317.20
Total Equity 55,634.22
Total Capital 63,951.42
Debt Weighting 13.01
Equity Weighting 86.99
Wacc

Build Up Free Cash

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 7,1957,003.608,209.408,550.6010,071.9010,991.0811,994.1413,088.7414,283.2415,586.75
EBITDA 1,310.901,563.902,039.102,349.502,555.602,599.152,836.363,095.213,377.683,685.93
EBIT 836.501,001.501,472.801,749.901,859.101,819.901,985.992,167.232,365.012,580.85
Tax Rate -6.82%5.98%7.00%16.04%18.19%8.08%8.08%8.08%8.08%8.08%
EBIAT 893.55941.591,369.641,469.281,520.881,672.871,825.541,992.142,173.942,372.34
Depreciation 474.40562.40566.30599.60696.50779.26850.37927.981,012.671,105.08
Accounts Receivable --1,016.80-5,317.10-4,655.8012,622.30-8,081.13-1,083.07-1,181.91-1,289.77-1,407.48
Inventories --890.60-1,154-558.20-22,455.1017,360.90-886.71-967.63-1,055.94-1,152.30
Accounts Payable -1,436.106,0614,852.60-16,145.1010,901.461,227.881,339.941,462.231,595.67
Capital Expenditure -138.80-99.30-128.60-182.70-193.60-197.23-215.23-234.87-256.31-279.70
UFCF 1,229.15933.391,397.241,524.78-23,954.1222,436.131,718.791,875.652,046.822,233.62
WACC
PV UFCF 20,956.591,499.571,528.511,558.011,588.08
SUM PV UFCF 27,130.77

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.06
Free cash flow (t + 1) 2,278.29
Terminal Value 45,025.50
Present Value of Terminal Value 32,012.70

Intrinsic Value

Enterprise Value 59,143.47
Net Debt 7,345.70
Equity Value 51,797.77
Shares Outstanding 219.30
Equity Value Per Share 236.20