Discounted Cash Flow (DCF) Analysis Unlevered

Emerson Electric Co. (EMR)

$83.4

-0.59 (-0.70%)

All numbers are in Millions, Currency in USD

Stock DCF: 66.88 | 83.4 | overvalue

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	17,408	18,372	16,785	18,236	19,629	20,275.92	20,944.16	21,634.42	22,347.43	23,083.94
Revenue (%)
EBITDA	3,606	3,860	3,339	4,023	5,353	4,499.20	4,647.48	4,800.64	4,958.86	5,122.29
EBITDA (%)
EBIT	2,848	3,038	2,485	3,054	4,314	3,504.73	3,620.24	3,739.55	3,862.80	3,990.10
EBIT (%)
Depreciation	758	822	854	969	1,039	994.46	1,027.24	1,061.09	1,096.06	1,132.19
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	1,093	1,494	3,315	2,354	1,804	2,281.42	2,356.61	2,434.28	2,514.51	2,597.38
Total Cash (%)
Account Receivables	3,344	2,985	2,802	2,971	3,008	3,396.90	3,508.85	3,624.49	3,743.95	3,867.34
Account Receivables (%)
Inventories	1,813	1,880	1,928	2,050	2,191	2,211.60	2,284.49	2,359.78	2,437.56	2,517.89
Inventories (%)
Accounts Payable	1,943	1,874	1,715	2,108	2,028	2,168.33	2,239.79	2,313.61	2,389.86	2,468.62
Accounts Payable (%)
Capital Expenditure	-617	-594	-538	-581	-531	-643.72	-664.93	-686.85	-709.48	-732.87
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 83.4
Beta	1.391
Diluted Shares Outstanding	596.30
Cost of Debt
Tax Rate	20.91
After-tax Cost of Debt	1.68%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.068
Total Debt	10,722
Total Equity	49,731.42
Total Capital	60,453.42
Debt Weighting	17.74
Equity Weighting	82.26
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	17,408	18,372	16,785	18,236	19,629	20,275.92	20,944.16	21,634.42	22,347.43	23,083.94
EBITDA	3,606	3,860	3,339	4,023	5,353	4,499.20	4,647.48	4,800.64	4,958.86	5,122.29
EBIT	2,848	3,038	2,485	3,054	4,314	3,504.73	3,620.24	3,739.55	3,862.80	3,990.10
Tax Rate	17.40%	19.34%	15.85%	20.91%	20.91%	18.88%	18.88%	18.88%	18.88%	18.88%
EBIAT	2,352.51	2,450.38	2,091.23	2,415.30	3,412.13	2,843	2,936.70	3,033.49	3,133.46	3,236.73
Depreciation	758	822	854	969	1,039	994.46	1,027.24	1,061.09	1,096.06	1,132.19
Accounts Receivable	-	359	183	-169	-37	-388.90	-111.95	-115.64	-119.45	-123.39
Inventories	-	-67	-48	-122	-141	-20.60	-72.89	-75.29	-77.77	-80.34
Accounts Payable	-	-69	-159	393	-80	140.33	71.46	73.82	76.25	78.76
Capital Expenditure	-617	-594	-538	-581	-531	-643.72	-664.93	-686.85	-709.48	-732.87
UFCF	2,493.51	2,901.38	2,383.23	2,905.30	3,662.13	2,924.57	3,185.62	3,290.61	3,399.06	3,511.09
WACC
PV UFCF						2,693.47	2,702.06	2,570.56	2,445.46	2,326.44
SUM PV UFCF										12,737.99

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.58
Free cash flow (t + 1)	3,581.31
Terminal Value	54,427.20
Present Value of Terminal Value	36,063.41

Intrinsic Value

Enterprise Value	48,801.40
Net Debt	8,918
Equity Value	39,883.40
Shares Outstanding	596.30
Equity Value Per Share	66.88