Discounted Cash Flow (DCF) Analysis Unlevered

W.W. Grainger, Inc. (GWW)

$571.79

+6.86 (+1.21%)
All numbers are in Millions, Currency in USD
Stock DCF: 217.30 | 571.79 | 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 10,424.8611,22111,48611,79713,02213,773.7014,568.8015,409.7916,299.3317,240.22
Revenue (%)
EBITDA 1,243.131,3851,4711,1621,6861,649.311,744.521,845.221,951.742,064.41
EBITDA (%)
EBIT 979.071,1281,2429801,5011,379.881,459.541,543.791,632.911,727.17
EBIT (%)
Depreciation 264.06257229182185269.43284.98301.43318.83337.24
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 326.88538360585241492.38520.80550.87582.67616.30
Total Cash (%)
Account Receivables 1,325.191,3851,4251,4741,7541,747.201,848.061,954.742,067.582,186.93
Account Receivables (%)
Inventories 1,429.201,5411,6551,7331,8701,953.172,065.922,185.172,311.312,444.73
Inventories (%)
Accounts Payable 731.58678719779816886.73937.92992.061,049.331,109.90
Accounts Payable (%)
Capital Expenditure -237.28-239-221-197-255-274.32-290.16-306.91-324.63-343.37
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 571.79
Beta 1.210
Diluted Shares Outstanding 52.20
Cost of Debt
Tax Rate 29.76
After-tax Cost of Debt 2.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.231
Total Debt 2,762
Total Equity 29,847.44
Total Capital 32,609.44
Debt Weighting 8.47
Equity Weighting 91.53
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 10,424.8611,22111,48611,79713,02213,773.7014,568.8015,409.7916,299.3317,240.22
EBITDA 1,243.131,3851,4711,1621,6861,649.311,744.521,845.221,951.742,064.41
EBIT 979.071,1281,2429801,5011,379.881,459.541,543.791,632.911,727.17
Tax Rate 37.38%27.66%29.78%26.61%29.76%30.24%30.24%30.24%30.24%30.24%
EBIAT 613.12816872.17719.221,054.24962.641,018.211,076.991,139.161,204.92
Depreciation 264.06257229182185269.43284.98301.43318.83337.24
Accounts Receivable --59.81-40-49-2806.80-100.86-106.68-112.84-119.35
Inventories --111.80-114-78-137-83.17-112.75-119.26-126.14-133.42
Accounts Payable --53.5841603770.7351.1954.1457.2760.57
Capital Expenditure -237.28-239-221-197-255-274.32-290.16-306.91-324.63-343.37
UFCF 639.91608.80767.17637.22604.24952.11850.61899.71951.651,006.59
WACC
PV UFCF 876.39720.70701.67683.15665.12
SUM PV UFCF 3,647.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.64
Free cash flow (t + 1) 1,026.72
Terminal Value 15,462.61
Present Value of Terminal Value 10,217.25

Intrinsic Value

Enterprise Value 13,864.29
Net Debt 2,521
Equity Value 11,343.29
Shares Outstanding 52.20
Equity Value Per Share 217.30