Discounted Cash Flow (DCF) Analysis Unlevered

Devon Energy Corporation (DVN)

$43.25

-0.53 (-1.21%)

All numbers are in Millions, Currency in USD

Stock DCF: 82.82 | 43.25 | 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	10,734	6,220	4,828	12,206	19,169	26,138.36	35,641.61	48,600.01	66,269.74	90,363.75
Revenue (%)
EBITDA	3,326	1,714	1,210	5,465	10,289	9,517.10	12,977.28	17,695.49	24,129.12	32,901.86
EBITDA (%)
EBIT	3,324.34	-235	-2,669	1,910	8,066	1,549.31	2,112.61	2,880.70	3,928.04	5,356.18
EBIT (%)
Depreciation	1.66	1,949	3,879	3,555	2,223	7,967.79	10,864.67	14,814.79	20,201.08	27,545.68
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	2,414	1,464	2,237	2,271	1,454	6,197.45	8,450.69	11,523.15	15,712.68	21,425.41
Total Cash (%)
Account Receivables	885	832	775	1,626	1,767	3,147.72	4,292.15	5,852.66	7,980.54	10,882.06
Account Receivables (%)
Inventories	197	1,276	539.52	1,364.01	2,142.11	2,920.93	3,982.91	5,430.99	7,405.56	10,098.04
Inventories (%)
Accounts Payable	662	428	242	500	859	1,392.56	1,898.87	2,589.24	3,530.63	4,814.28
Accounts Payable (%)
Capital Expenditure	-2,506	-1,941	-1,161	-2,007	-5,125	-6,366.16	-8,680.73	-11,836.82	-16,140.39	-22,008.63
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 43.25
Beta	2.225
Diluted Shares Outstanding	659
Cost of Debt
Tax Rate	22.64
After-tax Cost of Debt	4.27%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.623
Total Debt	6,697
Total Equity	28,501.75
Total Capital	35,198.75
Debt Weighting	19.03
Equity Weighting	80.97
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	10,734	6,220	4,828	12,206	19,169	26,138.36	35,641.61	48,600.01	66,269.74	90,363.75
EBITDA	3,326	1,714	1,210	5,465	10,289	9,517.10	12,977.28	17,695.49	24,129.12	32,901.86
EBIT	3,324.34	-235	-2,669	1,910	8,066	1,549.31	2,112.61	2,880.70	3,928.04	5,356.18
Tax Rate	-233.04%	27.52%	17.70%	2.93%	22.64%	-32.45%	-32.45%	-32.45%	-32.45%	-32.45%
EBIAT	11,071.50	-170.32	-2,196.53	1,853.98	6,240.13	2,052.06	2,798.14	3,815.47	5,202.68	7,094.25
Depreciation	1.66	1,949	3,879	3,555	2,223	7,967.79	10,864.67	14,814.79	20,201.08	27,545.68
Accounts Receivable	-	53	57	-851	-141	-1,380.72	-1,144.43	-1,560.52	-2,127.88	-2,901.52
Inventories	-	-1,079	736.48	-824.48	-778.11	-778.82	-1,061.98	-1,448.08	-1,974.57	-2,692.48
Accounts Payable	-	-234	-186	258	359	533.56	506.30	690.38	941.38	1,283.65
Capital Expenditure	-2,506	-1,941	-1,161	-2,007	-5,125	-6,366.16	-8,680.73	-11,836.82	-16,140.39	-22,008.63
UFCF	8,567.16	-1,422.32	1,128.95	1,984.50	2,778.02	2,027.72	3,281.98	4,475.22	6,102.30	8,320.94
WACC
PV UFCF						1,800.02	2,586.27	3,130.55	3,789.39	4,586.87
SUM PV UFCF										15,893.10

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	12.65
Free cash flow (t + 1)	8,487.36
Terminal Value	79,693.53
Present Value of Terminal Value	43,930.59

Intrinsic Value

Enterprise Value	59,823.69
Net Debt	5,243
Equity Value	54,580.69
Shares Outstanding	659
Equity Value Per Share	82.82