Discounted Cash Flow (DCF) Analysis Unlevered

CVS Health Corporation (CVS)

$93.94

+1.28 (+1.38%)

All numbers are in Millions, Currency in USD

Stock DCF: 124.31 | 93.94 | 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	184,765	194,579	256,776	268,706	292,111	329,087.04	370,743.58	417,673.09	470,543.05	530,105.39
Revenue (%)
EBITDA	11,800	6,745	16,406	17,096	12,923	17,789.47	20,041.30	22,578.18	25,436.17	28,655.93
EBITDA (%)
EBIT	9,321	4,027	12,035	12,655	8,473.01	12,776.19	14,393.43	16,215.38	18,267.96	20,580.36
EBIT (%)
Depreciation	2,479	2,718	4,371	4,441	4,449.99	5,013.28	5,647.87	6,362.79	7,168.21	8,075.58
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	1,807	6,581	8,056	10,854	12,525	10,415.37	11,733.77	13,219.06	14,892.36	16,777.46
Total Cash (%)
Account Receivables	13,181	17,631	19,617	21,742	24,431	26,517.66	29,874.32	33,655.88	37,916.11	42,715.61
Account Receivables (%)
Inventories	15,296	16,450	17,516	18,496	17,760	24,034.89	27,077.28	30,504.78	34,366.13	38,716.27
Inventories (%)
Accounts Payable	8,863	8,925	10,492	11,138	12,544	14,419.99	16,245.31	18,301.67	20,618.34	23,228.25
Accounts Payable (%)
Capital Expenditure	-1,918	-2,037	-2,457	-2,437	-2,520	-3,166.77	-3,567.62	-4,019.22	-4,527.98	-5,101.14
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 93.94
Beta	0.772
Diluted Shares Outstanding	1,314
Cost of Debt
Tax Rate	24.20
After-tax Cost of Debt	2.03%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.534
Total Debt	93,263
Total Equity	123,437.16
Total Capital	216,700.16
Debt Weighting	43.04
Equity Weighting	56.96
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	184,765	194,579	256,776	268,706	292,111	329,087.04	370,743.58	417,673.09	470,543.05	530,105.39
EBITDA	11,800	6,745	16,406	17,096	12,923	17,789.47	20,041.30	22,578.18	25,436.17	28,655.93
EBIT	9,321	4,027	12,035	12,655	8,473.01	12,776.19	14,393.43	16,215.38	18,267.96	20,580.36
Tax Rate	19.91%	142.25%	26.26%	26.52%	24.20%	47.83%	47.83%	47.83%	47.83%	47.83%
EBIAT	7,465.37	-1,701.31	8,874.09	9,298.90	6,422.25	6,665.51	7,509.24	8,459.78	9,530.64	10,737.05
Depreciation	2,479	2,718	4,371	4,441	4,449.99	5,013.28	5,647.87	6,362.79	7,168.21	8,075.58
Accounts Receivable	-	-4,450	-1,986	-2,125	-2,689	-2,086.66	-3,356.66	-3,781.56	-4,260.23	-4,799.50
Inventories	-	-1,154	-1,066	-980	736	-6,274.89	-3,042.39	-3,427.50	-3,861.36	-4,350.14
Accounts Payable	-	62	1,567	646	1,406	1,875.99	1,825.31	2,056.37	2,316.67	2,609.91
Capital Expenditure	-1,918	-2,037	-2,457	-2,437	-2,520	-3,166.77	-3,567.62	-4,019.22	-4,527.98	-5,101.14
UFCF	8,026.37	-6,562.31	9,303.09	8,843.90	7,805.23	2,026.48	5,015.76	5,650.67	6,365.94	7,171.76
WACC
PV UFCF						1,937.36	4,584.31	4,937.47	5,317.85	5,727.53
SUM PV UFCF										22,504.51

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.60
Free cash flow (t + 1)	7,315.19
Terminal Value	281,353.52
Present Value of Terminal Value	224,695.27

Intrinsic Value

Enterprise Value	247,199.79
Net Debt	83,855
Equity Value	163,344.79
Shares Outstanding	1,314
Equity Value Per Share	124.31