Discounted Cash Flow (DCF) Analysis Unlevered

Diageo plc (DEO)

$175.09

-1.31 (-0.74%)
All numbers are in Millions, Currency in USD
Stock DCF: 211.30 | 175.09 | 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 12,16312,86711,75212,73315,45216,488.2117,593.9118,773.7520,032.7221,376.11
Revenue (%)
EBITDA 4,5204,9384,4084,5105,6286,097.016,505.876,942.157,407.697,904.45
EBITDA (%)
EBIT 4,0274,5642,5694,0634,8005,058.995,398.255,760.256,146.546,558.72
EBIT (%)
Depreciation 4933741,8394478281,038.011,107.621,181.901,261.161,345.73
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 8991,0563,3962,7952,5362,732.382,915.613,111.133,319.763,542.38
Total Cash (%)
Account Receivables ----------
Account Receivables (%)
Inventories 5,0155,4725,7726,0457,0947,461.217,961.568,495.469,065.179,673.07
Inventories (%)
Accounts Payable 1,5141,6941,3332,0145,8872,996.623,197.573,4123,640.813,884.96
Accounts Payable (%)
Capital Expenditure -584-671-700-626-1,097-922.96-984.86-1,050.90-1,121.37-1,196.57
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 175.09
Beta 0.410
Diluted Shares Outstanding 581.25
Cost of Debt
Tax Rate 25.94
After-tax Cost of Debt 2.32%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.466
Total Debt 16,020
Total Equity 101,771.06
Total Capital 117,791.06
Debt Weighting 13.60
Equity Weighting 86.40
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 12,16312,86711,75212,73315,45216,488.2117,593.9118,773.7520,032.7221,376.11
EBITDA 4,5204,9384,4084,5105,6286,097.016,505.876,942.157,407.697,904.45
EBIT 4,0274,5642,5694,0634,8005,058.995,398.255,760.256,146.546,558.72
Tax Rate 19.20%25.38%31.03%28.22%25.94%25.96%25.96%25.96%25.96%25.96%
EBIAT 3,253.903,405.491,771.772,916.243,554.873,745.893,997.094,265.134,551.154,856.35
Depreciation 4933741,8394478281,038.011,107.621,181.901,261.161,345.73
Accounts Receivable ----------
Inventories --457-300-273-1,049-367.21-500.35-533.90-569.70-607.91
Accounts Payable -180-3616813,873-2,890.38200.95214.43228.81244.15
Capital Expenditure -584-671-700-626-1,097-922.96-984.86-1,050.90-1,121.37-1,196.57
UFCF 3,162.902,831.492,249.773,145.246,109.87603.353,820.464,076.664,350.044,641.75
WACC
PV UFCF 574.403,462.633,517.553,573.343,630.02
SUM PV UFCF 14,757.94

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.04
Free cash flow (t + 1) 4,734.59
Terminal Value 155,743.02
Present Value of Terminal Value 121,796.56

Intrinsic Value

Enterprise Value 136,554.50
Net Debt 13,735
Equity Value 122,819.50
Shares Outstanding 581.25
Equity Value Per Share 211.30