Discounted Cash Flow (DCF) Analysis Unlevered

Arrow Electronics, Inc. (ARW)

$126.78

-2.01 (-1.56%)

All numbers are in Millions, Currency in USD

Stock DCF: 249.43 | 126.78 | 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	29,676.77	28,916.85	28,673.36	34,477.02	37,124.42	39,399.84	41,814.72	44,377.61	47,097.59	49,984.28
Revenue (%)
EBITDA	1,305.15	332.60	1,083.50	1,760.95	2,248.91	1,614.78	1,713.75	1,818.79	1,930.27	2,048.58
EBITDA (%)
EBIT	1,118.76	142.81	894.44	1,565.83	2,061.52	1,377.24	1,461.66	1,551.25	1,646.32	1,747.23
EBIT (%)
Depreciation	186.38	189.79	189.06	195.12	187.38	237.53	252.09	267.54	283.94	301.35
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	509.33	300.10	373.62	222.19	176.91	408.03	433.04	459.58	487.75	517.65
Total Cash (%)
Account Receivables	8,945.46	8,482.69	9,205.34	11,123.95	12,322.72	12,374.68	13,133.15	13,938.10	14,792.39	15,699.04
Account Receivables (%)
Inventories	3,878.68	3,477.12	3,287.31	4,201.97	5,319.37	4,970.30	5,274.94	5,598.25	5,941.38	6,305.54
Inventories (%)
Accounts Payable	7,631.88	7,046.22	7,937.89	9,617.08	10,460.42	10,546.43	11,192.84	11,878.87	12,606.95	13,379.65
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	$ 126.78
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	10.308
Total Debt	3,772.85
Total Equity	8,298.13
Total Capital	12,070.98
Debt Weighting	31.26
Equity Weighting	68.74
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	29,676.77	28,916.85	28,673.36	34,477.02	37,124.42	39,399.84	41,814.72	44,377.61	47,097.59	49,984.28
EBITDA	1,305.15	332.60	1,083.50	1,760.95	2,248.91	1,614.78	1,713.75	1,818.79	1,930.27	2,048.58
EBIT	1,118.76	142.81	894.44	1,565.83	2,061.52	1,377.24	1,461.66	1,551.25	1,646.32	1,747.23
Tax Rate	21.24%	-82.50%	23.03%	22.85%	24.27%	1.78%	1.78%	1.78%	1.78%	1.78%
EBIAT	881.11	260.62	688.50	1,208.08	1,561.21	1,352.76	1,435.68	1,523.67	1,617.06	1,716.17
Depreciation	186.38	189.79	189.06	195.12	187.38	237.53	252.09	267.54	283.94	301.35
Accounts Receivable	-	462.78	-722.66	-1,918.60	-1,198.77	-51.96	-758.46	-804.95	-854.29	-906.65
Inventories	-	401.56	189.81	-914.66	-1,117.40	349.06	-304.64	-323.31	-343.13	-364.16
Accounts Payable	-	-585.66	891.67	1,679.19	843.34	86.01	646.41	686.03	728.08	772.70
Capital Expenditure	-155.34	-150.81	-124.30	-83.05	-78.84	-152.22	-161.55	-171.45	-181.96	-193.11
UFCF	912.15	578.28	1,112.08	166.08	196.92	1,821.20	1,109.53	1,177.54	1,249.71	1,326.31
WACC
PV UFCF						1,682.40	946.86	928.30	910.12	892.29
SUM PV UFCF										5,359.96

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.25
Free cash flow (t + 1)	1,352.83
Terminal Value	21,645.31
Present Value of Terminal Value	14,562.11

Intrinsic Value

Enterprise Value	19,922.07
Net Debt	3,595.93
Equity Value	16,326.14
Shares Outstanding	65.45
Equity Value Per Share	249.43