Discounted Cash Flow (DCF) Analysis Unlevered

Cummins Inc. (CMI)

$194.11

+0.58 (+0.30%)
All numbers are in Millions, Currency in USD
Stock DCF: 266.55 | 194.11 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 20,42823,77123,57119,81124,02125,271.4426,586.9727,970.9929,427.0530,958.91
Revenue (%)
EBITDA 3,0343,4323,6073,0893,4913,776.473,973.064,179.884,397.474,626.38
EBITDA (%)
EBIT 2,4512,8212,9352,4162,8293,047.223,205.853,372.733,548.303,733.01
EBIT (%)
Depreciation 583611672673662729.25767.21807.15849.16893.37
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 1,5671,5251,4703,8623,1872,683.042,822.712,969.653,124.243,286.87
Total Cash (%)
Account Receivables 3,6183,8663,6703,8203,9904,318.244,543.034,779.525,028.335,290.08
Account Receivables (%)
Inventories 3,1663,7593,4863,4254,3554,120.234,334.714,560.364,797.755,047.50
Inventories (%)
Accounts Payable 2,5792,8222,5342,8203,0213,136.593,299.873,471.643,652.363,842.49
Accounts Payable (%)
Capital Expenditure -587-784-775-575-786-790.19-831.33-874.60-920.13-968.03
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 194.11
Beta 1.020
Diluted Shares Outstanding 149
Cost of Debt
Tax Rate 22.54
After-tax Cost of Debt 2.07%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.701
Total Debt 4,159
Total Equity 28,922.39
Total Capital 33,081.39
Debt Weighting 12.57
Equity Weighting 87.43
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 20,42823,77123,57119,81124,02125,271.4426,586.9727,970.9929,427.0530,958.91
EBITDA 3,0343,4323,6073,0893,4913,776.473,973.064,179.884,397.474,626.38
EBIT 2,4512,8212,9352,4162,8293,047.223,205.853,372.733,548.303,733.01
Tax Rate 57.76%22.23%20.25%23.48%22.54%29.25%29.25%29.25%29.25%29.25%
EBIAT 1,035.332,193.882,340.541,848.682,191.422,155.832,268.062,386.132,510.342,641.02
Depreciation 583611672673662729.25767.21807.15849.16893.37
Accounts Receivable --248196-150-170-328.24-224.79-236.49-248.80-261.76
Inventories --59327361-930234.77-214.48-225.65-237.39-249.75
Accounts Payable -243-288286201115.59163.28171.78180.72190.13
Capital Expenditure -587-784-775-575-786-790.19-831.33-874.60-920.13-968.03
UFCF 1,031.331,422.882,418.542,143.681,168.422,117.011,927.942,028.302,133.892,244.97
WACC
PV UFCF 1,978.701,684.251,656.161,628.541,601.38
SUM PV UFCF 8,549.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.99
Free cash flow (t + 1) 2,289.87
Terminal Value 45,889.19
Present Value of Terminal Value 32,733.65

Intrinsic Value

Enterprise Value 41,282.69
Net Debt 1,567
Equity Value 39,715.69
Shares Outstanding 149
Equity Value Per Share 266.55