Discounted Cash Flow (DCF) Analysis Unlevered

The Goodyear Tire & Rubber Company (GT)

$11.02

+0.34 (+3.18%)

All numbers are in Millions, Currency in USD

Stock DCF: -17.69 | 11.02 | 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	15,475	14,745	12,321	17,478	20,805	22,871.66	25,143.62	27,641.26	30,387	33,405.49
Revenue (%)
EBITDA	2,095	1,298	39	1,767	1,807	1,896.19	2,084.54	2,291.61	2,519.25	2,769.50
EBITDA (%)
EBIT	1,317	503	-820	884	843	657.62	722.94	794.75	873.70	960.49
EBIT (%)
Depreciation	778	795	859	883	964	1,238.57	1,361.60	1,496.86	1,645.55	1,809.01
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	801	908	1,539	1,088	1,227	1,644.36	1,807.70	1,987.27	2,184.68	2,401.69
Total Cash (%)
Account Receivables	2,030	1,941	1,691	2,387	2,610	3,028.60	3,329.44	3,660.17	4,023.75	4,423.45
Account Receivables (%)
Inventories	2,856	2,851	2,153	3,594	4,571	4,473.64	4,918.03	5,406.57	5,943.63	6,534.04
Inventories (%)
Accounts Payable	2,920	2,908	2,945	4,148	4,803	5,000.29	5,496.99	6,043.03	6,643.32	7,303.23
Accounts Payable (%)
Capital Expenditure	-811	-770	-647	-981	-1,061	-1,208.84	-1,328.92	-1,460.92	-1,606.05	-1,765.58
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 11.02
Beta	1.816
Diluted Shares Outstanding	234
Cost of Debt
Tax Rate	49.37
After-tax Cost of Debt	2.56%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.065
Total Debt	8,910
Total Equity	2,578.68
Total Capital	11,488.68
Debt Weighting	77.55
Equity Weighting	22.45
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	15,475	14,745	12,321	17,478	20,805	22,871.66	25,143.62	27,641.26	30,387	33,405.49
EBITDA	2,095	1,298	39	1,767	1,807	1,896.19	2,084.54	2,291.61	2,519.25	2,769.50
EBIT	1,317	503	-820	884	843	657.62	722.94	794.75	873.70	960.49
Tax Rate	31.45%	275.71%	-10.00%	-48.93%	49.37%	59.52%	59.52%	59.52%	59.52%	59.52%
EBIAT	902.75	-883.80	-902	1,316.52	426.78	266.20	292.64	321.71	353.66	388.79
Depreciation	778	795	859	883	964	1,238.57	1,361.60	1,496.86	1,645.55	1,809.01
Accounts Receivable	-	89	250	-696	-223	-418.60	-300.85	-330.73	-363.58	-399.70
Inventories	-	5	698	-1,441	-977	97.36	-444.39	-488.53	-537.06	-590.41
Accounts Payable	-	-12	37	1,203	655	197.29	496.70	546.04	600.28	659.91
Capital Expenditure	-811	-770	-647	-981	-1,061	-1,208.84	-1,328.92	-1,460.92	-1,606.05	-1,765.58
UFCF	869.75	-776.80	295	284.52	-215.22	171.98	76.79	84.42	92.81	102.03
WACC
PV UFCF						164.27	70.07	73.58	77.26	81.13
SUM PV UFCF										466.31

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.69
Free cash flow (t + 1)	104.07
Terminal Value	3,868.67
Present Value of Terminal Value	3,076.35

Intrinsic Value

Enterprise Value	3,542.65
Net Debt	7,683
Equity Value	-4,140.35
Shares Outstanding	234
Equity Value Per Share	-17.69