Discounted Cash Flow (DCF) Analysis Unlevered

Best Buy Co., Inc. (BBY)

$75.36

-0.32 (-0.42%)

All numbers are in Millions, Currency in USD

Stock DCF: 108.62 | 75.36 | undervalue

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	42,879	43,638	47,262	51,761	46,298	47,344.31	48,414.27	49,508.40	50,627.27	51,771.41
Revenue (%)
EBITDA	2,731	2,869	3,268	3,922	2,742	3,158.61	3,230	3,302.99	3,377.64	3,453.97
EBITDA (%)
EBIT	1,961	2,057	2,429	3,053	1,824	2,297.57	2,349.50	2,402.59	2,456.89	2,512.42
EBIT (%)
Depreciation	770	812	839	869	918	861.04	880.50	900.40	920.75	941.56
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	1,980	2,229	5,494	2,936	1,874	2,941.98	3,008.47	3,076.46	3,145.98	3,217.08
Total Cash (%)
Account Receivables	1,015	1,149	1,061	1,042	1,141	1,110	1,135.09	1,160.74	1,186.97	1,213.80
Account Receivables (%)
Inventories	5,409	5,174	5,612	5,965	5,140	5,583.93	5,710.13	5,839.17	5,971.14	6,106.08
Inventories (%)
Accounts Payable	5,257	5,288	6,979	6,803	5,687	6,114.15	6,252.33	6,393.63	6,538.12	6,685.88
Accounts Payable (%)
Capital Expenditure	-819	-743	-713	-737	-930	-809.95	-828.26	-846.98	-866.12	-885.69
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 75.36
Beta	1.521
Diluted Shares Outstanding	225.70
Cost of Debt
Tax Rate	20.64
After-tax Cost of Debt	0.70%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.894
Total Debt	3,978
Total Equity	17,008.75
Total Capital	20,986.75
Debt Weighting	18.95
Equity Weighting	81.05
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	42,879	43,638	47,262	51,761	46,298	47,344.31	48,414.27	49,508.40	50,627.27	51,771.41
EBITDA	2,731	2,869	3,268	3,922	2,742	3,158.61	3,230	3,302.99	3,377.64	3,453.97
EBIT	1,961	2,057	2,429	3,053	1,824	2,297.57	2,349.50	2,402.59	2,456.89	2,512.42
Tax Rate	22.46%	22.68%	24.36%	18.85%	20.64%	21.80%	21.80%	21.80%	21.80%	21.80%
EBIAT	1,520.61	1,590.49	1,837.33	2,477.53	1,447.57	1,796.78	1,837.39	1,878.91	1,921.38	1,964.80
Depreciation	770	812	839	869	918	861.04	880.50	900.40	920.75	941.56
Accounts Receivable	-	-134	88	19	-99	31	-25.09	-25.65	-26.23	-26.82
Inventories	-	235	-438	-353	825	-443.93	-126.19	-129.05	-131.96	-134.94
Accounts Payable	-	31	1,691	-176	-1,116	427.15	138.18	141.30	144.49	147.76
Capital Expenditure	-819	-743	-713	-737	-930	-809.95	-828.26	-846.98	-866.12	-885.69
UFCF	1,471.61	1,791.49	3,304.33	2,099.53	1,045.57	1,862.09	1,876.53	1,918.94	1,962.31	2,006.65
WACC
PV UFCF						1,708.96	1,580.60	1,483.41	1,392.19	1,306.58
SUM PV UFCF										7,471.74

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.96
Free cash flow (t + 1)	2,046.79
Terminal Value	29,407.84
Present Value of Terminal Value	19,148.19

Intrinsic Value

Enterprise Value	26,619.93
Net Debt	2,104
Equity Value	24,515.93
Shares Outstanding	225.70
Equity Value Per Share	108.62