Discounted Cash Flow (DCF) Analysis Unlevered

Arrow Electronics, Inc. (ARW)

$128.54

+2.56 (+2.03%)
All numbers are in Millions, Currency in USD
Stock DCF: 244.72 | 128.54 | undervalue

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 29,676.7728,916.8528,673.3634,477.0237,124.4239,399.8441,814.7244,377.6147,097.5949,984.28
Revenue (%)
EBITDA 1,305.15332.601,083.501,760.952,248.911,614.781,713.751,818.791,930.272,048.58
EBITDA (%)
EBIT 1,118.76142.81894.441,565.832,061.521,377.241,461.661,551.251,646.321,747.23
EBIT (%)
Depreciation 186.38189.79189.06195.12187.38237.53252.09267.54283.94301.35
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 509.33300.10373.62222.19176.91408.03433.04459.58487.75517.65
Total Cash (%)
Account Receivables 8,945.468,482.699,205.3411,123.9512,322.7212,374.6813,133.1513,938.1014,792.3915,699.04
Account Receivables (%)
Inventories 3,878.683,477.123,287.314,201.975,319.374,970.305,274.945,598.255,941.386,305.54
Inventories (%)
Accounts Payable 7,631.887,046.227,937.899,617.0810,460.4210,546.4311,192.8411,878.8712,606.9513,379.65
Accounts Payable (%)
Capital Expenditure -155.34-150.81-124.30-83.05-78.84-152.22-161.55-171.45-181.96-193.11
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 128.54
Beta 1.401
Diluted Shares Outstanding 65.45
Cost of Debt
Tax Rate 24.27
After-tax Cost of Debt 3.73%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.425
Total Debt 3,772.85
Total Equity 8,413.33
Total Capital 12,186.18
Debt Weighting 30.96
Equity Weighting 69.04
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 29,676.7728,916.8528,673.3634,477.0237,124.4239,399.8441,814.7244,377.6147,097.5949,984.28
EBITDA 1,305.15332.601,083.501,760.952,248.911,614.781,713.751,818.791,930.272,048.58
EBIT 1,118.76142.81894.441,565.832,061.521,377.241,461.661,551.251,646.321,747.23
Tax Rate 21.24%-82.50%23.03%22.85%24.27%1.78%1.78%1.78%1.78%1.78%
EBIAT 881.11260.62688.501,208.081,561.211,352.761,435.681,523.671,617.061,716.17
Depreciation 186.38189.79189.06195.12187.38237.53252.09267.54283.94301.35
Accounts Receivable -462.78-722.66-1,918.60-1,198.77-51.96-758.46-804.95-854.29-906.65
Inventories -401.56189.81-914.66-1,117.40349.06-304.64-323.31-343.13-364.16
Accounts Payable --585.66891.671,679.19843.3486.01646.41686.03728.08772.70
Capital Expenditure -155.34-150.81-124.30-83.05-78.84-152.22-161.55-171.45-181.96-193.11
UFCF 912.15578.281,112.08166.08196.921,821.201,109.531,177.541,249.711,326.31
WACC
PV UFCF 1,680.85945.11925.74906.76888.18
SUM PV UFCF 5,346.63

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.35
Free cash flow (t + 1) 1,352.83
Terminal Value 21,304.44
Present Value of Terminal Value 14,266.77

Intrinsic Value

Enterprise Value 19,613.40
Net Debt 3,595.93
Equity Value 16,017.47
Shares Outstanding 65.45
Equity Value Per Share 244.72