Discounted Cash Flow (DCF) Analysis Unlevered

Best Buy Co., Inc. (BBY)

$74.69

+3.40 (+4.77%)

All numbers are in Millions, Currency in USD

Stock DCF: 136.65 | 74.69 | 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	42,151	42,879	43,638	47,262	51,761	54,520.01	57,426.09	60,487.07	63,711.21	67,107.21
Revenue (%)
EBITDA	2,576	2,731	2,869	3,268	3,922	3,657.94	3,852.92	4,058.29	4,274.61	4,502.46
EBITDA (%)
EBIT	1,893	1,961	2,057	2,429	3,053	2,705.92	2,850.15	3,002.07	3,162.09	3,330.64
EBIT (%)
Depreciation	683	770	812	839	869	952.02	1,002.77	1,056.22	1,112.52	1,171.82
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	3,133	1,980	2,229	5,494	2,936	3,756.99	3,957.25	4,168.18	4,390.36	4,624.38
Total Cash (%)
Account Receivables	1,049	1,015	1,149	1,061	1,042	1,280.88	1,349.15	1,421.07	1,496.81	1,576.60
Account Receivables (%)
Inventories	5,209	5,409	5,174	5,612	5,965	6,567.21	6,917.26	7,285.97	7,674.34	8,083.40
Inventories (%)
Accounts Payable	4,873	5,257	5,288	6,979	6,803	6,962.04	7,333.14	7,724.02	8,135.73	8,569.39
Accounts Payable (%)
Capital Expenditure	-688	-819	-743	-713	-737	-891.66	-939.19	-989.25	-1,041.98	-1,097.52
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 74.69
Beta	1.435
Diluted Shares Outstanding	249.30
Cost of Debt
Tax Rate	18.85
After-tax Cost of Debt	0.52%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.899
Total Debt	3,888
Total Equity	18,620.22
Total Capital	22,508.22
Debt Weighting	17.27
Equity Weighting	82.73
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	42,151	42,879	43,638	47,262	51,761	54,520.01	57,426.09	60,487.07	63,711.21	67,107.21
EBITDA	2,576	2,731	2,869	3,268	3,922	3,657.94	3,852.92	4,058.29	4,274.61	4,502.46
EBIT	1,893	1,961	2,057	2,429	3,053	2,705.92	2,850.15	3,002.07	3,162.09	3,330.64
Tax Rate	44.96%	22.46%	22.68%	24.36%	18.85%	26.66%	26.66%	26.66%	26.66%	26.66%
EBIAT	1,041.83	1,520.61	1,590.49	1,837.33	2,477.53	1,984.47	2,090.25	2,201.67	2,319.02	2,442.63
Depreciation	683	770	812	839	869	952.02	1,002.77	1,056.22	1,112.52	1,171.82
Accounts Receivable	-	34	-134	88	19	-238.88	-68.27	-71.91	-75.75	-79.78
Inventories	-	-200	235	-438	-353	-602.21	-350.05	-368.71	-388.36	-409.06
Accounts Payable	-	384	31	1,691	-176	159.04	371.10	390.88	411.71	433.66
Capital Expenditure	-688	-819	-743	-713	-737	-891.66	-939.19	-989.25	-1,041.98	-1,097.52
UFCF	1,036.83	1,689.61	1,791.49	3,304.33	2,099.53	1,362.79	2,106.60	2,218.89	2,337.16	2,461.74
WACC
PV UFCF						1,258.58	1,796.74	1,747.80	1,700.19	1,653.87
SUM PV UFCF										8,157.18

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.28
Free cash flow (t + 1)	2,510.98
Terminal Value	39,983.71
Present Value of Terminal Value	26,862.22

Intrinsic Value

Enterprise Value	35,019.39
Net Debt	952
Equity Value	34,067.39
Shares Outstanding	249.30
Equity Value Per Share	136.65