Discounted Cash Flow (DCF) Analysis Unlevered

Warner Bros. Discovery, Inc. (DISCK)

$24.42

+1.34 (+5.81%)
All numbers are in Millions, Currency in USD
Stock DCF: 230.12 | 24.42 | 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 6,87310,55311,14410,67112,19114,298.3016,769.8719,668.6623,068.5427,056.10
Revenue (%)
EBITDA 2,5546,3507,0276,5556,9587,975.369,353.9610,970.8612,867.2515,091.45
EBITDA (%)
EBIT 3141,6642,8272,2401,8752,347.102,752.813,228.663,786.764,441.33
EBIT (%)
Depreciation 2,2404,6864,2004,3155,0835,628.266,601.147,742.209,080.4910,650.12
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 7,3099861,5522,0913,9055,182.876,078.777,129.538,361.929,807.34
Total Cash (%)
Account Receivables 1,8382,6202,6332,5372,4463,4043,992.414,682.525,491.936,441.25
Account Receivables (%)
Inventories ----18,92322,193.9826,030.3730,529.9135,807.2341,996.77
Inventories (%)
Accounts Payable 277325463397412525.16615.94722.41847.29993.75
Accounts Payable (%)
Capital Expenditure -135-147-289-402-373-365.39-428.55-502.63-589.51-691.41
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 24.42
Beta 1.127
Diluted Shares Outstanding 664
Cost of Debt
Tax Rate 29.80
After-tax Cost of Debt 3.01%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.016
Total Debt 14,759
Total Equity 16,214.88
Total Capital 30,973.88
Debt Weighting 47.65
Equity Weighting 52.35
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 6,87310,55311,14410,67112,19114,298.3016,769.8719,668.6623,068.5427,056.10
EBITDA 2,5546,3507,0276,5556,9587,975.369,353.9610,970.8612,867.2515,091.45
EBIT 3141,6642,8272,2401,8752,347.102,752.813,228.663,786.764,441.33
Tax Rate -145.99%41.88%9.81%29.46%29.80%-7.01%-7.01%-7.01%-7.01%-7.01%
EBIAT 772.39967.142,549.721,580.191,316.292,511.612,945.763,454.964,052.174,752.62
Depreciation 2,2404,6864,2004,3155,0835,628.266,601.147,742.209,080.4910,650.12
Accounts Receivable --782-139691-958-588.41-690.12-809.41-949.32
Inventories ------3,270.98-3,836.39-4,499.54-5,277.32-6,189.54
Accounts Payable -48138-6615113.1690.78106.47124.87146.46
Capital Expenditure -135-147-289-402-373-365.39-428.55-502.63-589.51-691.41
UFCF 2,877.394,772.146,585.725,523.196,132.293,658.664,784.335,611.346,581.307,718.93
WACC
PV UFCF 3,446.374,245.214,690.125,181.655,724.70
SUM PV UFCF 23,288.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.16
Free cash flow (t + 1) 7,873.31
Terminal Value 189,262.16
Present Value of Terminal Value 140,365.13

Intrinsic Value

Enterprise Value 163,653.18
Net Debt 10,854
Equity Value 152,799.18
Shares Outstanding 664
Equity Value Per Share 230.12