Discounted Cash Flow (DCF) Analysis Unlevered

Graco Inc. (GGG)

$68.04

+0.26 (+0.38%)

All numbers are in Millions, Currency in USD

Stock DCF: 50.57 | 68.04 | overvalue

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	1,474.74	1,653.29	1,646.04	1,650.11	1,987.61	2,148.45	2,322.30	2,510.23	2,713.36	2,932.93
Revenue (%)
EBITDA	408.88	472.90	467.90	441.26	578.01	604.04	652.92	705.76	762.87	824.60
EBITDA (%)
EBIT	363.30	425.15	418.99	385.93	518.68	538.35	581.91	629	679.90	734.92
EBIT (%)
Depreciation	45.58	47.75	48.91	55.33	59.32	65.69	71.01	76.76	82.97	89.68
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	103.66	132.12	220.97	378.91	624.30	355.86	384.65	415.78	449.43	485.79
Total Cash (%)
Account Receivables	256.42	274.61	267.34	314.95	325.13	368.17	397.96	430.17	464.98	502.61
Account Receivables (%)
Inventories	239.35	283.98	273.23	285.70	382.30	371.92	402.01	434.54	469.71	507.72
Inventories (%)
Accounts Payable	48.75	56.90	54.12	58.30	78.43	75.26	81.35	87.93	95.05	102.74
Accounts Payable (%)
Capital Expenditure	-40.19	-53.85	-127.95	-71.34	-133.57	-106.56	-115.18	-124.50	-134.58	-145.47
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 68.04
Beta	0.806
Diluted Shares Outstanding	174.53
Cost of Debt
Tax Rate	13.49
After-tax Cost of Debt	3.91%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.271
Total Debt	226.11
Total Equity	11,874.75
Total Capital	12,100.86
Debt Weighting	1.87
Equity Weighting	98.13
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	1,474.74	1,653.29	1,646.04	1,650.11	1,987.61	2,148.45	2,322.30	2,510.23	2,713.36	2,932.93
EBITDA	408.88	472.90	467.90	441.26	578.01	604.04	652.92	705.76	762.87	824.60
EBIT	363.30	425.15	418.99	385.93	518.68	538.35	581.91	629	679.90	734.92
Tax Rate	27.28%	16.97%	15.28%	11.80%	13.49%	16.96%	16.96%	16.96%	16.96%	16.96%
EBIAT	264.19	353	354.96	340.41	448.70	447.02	483.20	522.30	564.57	610.25
Depreciation	45.58	47.75	48.91	55.33	59.32	65.69	71.01	76.76	82.97	89.68
Accounts Receivable	-	-18.19	7.26	-47.60	-10.19	-43.04	-29.79	-32.20	-34.81	-37.63
Inventories	-	-44.63	10.75	-12.47	-96.60	10.39	-30.10	-32.53	-35.16	-38.01
Accounts Payable	-	8.15	-2.78	4.19	20.13	-3.17	6.09	6.58	7.12	7.69
Capital Expenditure	-40.19	-53.85	-127.95	-71.34	-133.57	-106.56	-115.18	-124.50	-134.58	-145.47
UFCF	269.58	292.23	291.14	268.51	287.81	370.33	385.23	416.40	450.09	486.52
WACC
PV UFCF						345.42	335.15	337.91	340.69	343.50
SUM PV UFCF										1,702.68

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.21
Free cash flow (t + 1)	496.25
Terminal Value	9,524.90
Present Value of Terminal Value	6,724.87

Intrinsic Value

Enterprise Value	8,427.55
Net Debt	-398.19
Equity Value	8,825.74
Shares Outstanding	174.53
Equity Value Per Share	50.57