Discounted Cash Flow (DCF) Analysis Unlevered

Herc Holdings Inc. (HRI)

$122.66

+1.94 (+1.61%)

All numbers are in Millions, Currency in USD

Stock DCF: -127.41 | 122.66 | 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	1,976.70	1,999	1,781.30	2,073.10	2,738.80	3,003.99	3,294.85	3,613.88	3,963.79	4,347.59
Revenue (%)
EBITDA	650.70	720	669.20	868.60	1,189.70	1,152.58	1,264.18	1,386.59	1,520.84	1,668.10
EBITDA (%)
EBIT	205.90	249.90	202.80	379.90	558.90	438.79	481.28	527.88	578.99	635.05
EBIT (%)
Depreciation	444.80	470.10	466.40	488.70	630.80	713.79	782.91	858.71	941.86	1,033.05
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	27.80	33	33	35.10	53.50	51.41	56.38	61.84	67.83	74.40
Total Cash (%)
Account Receivables	332.40	306.70	301.20	388.10	522.50	521.89	572.42	627.85	688.64	755.32
Account Receivables (%)
Inventories	17.90	18.10	16.13	18.77	24.80	27.20	29.84	32.73	35.89	39.37
Inventories (%)
Accounts Payable	147	126.50	125.80	280.60	318.30	276.27	303.02	332.36	364.54	399.84
Accounts Payable (%)
Capital Expenditure	-849	-695.30	-385.50	-641.80	-1,272.20	-1,062.11	-1,164.95	-1,277.75	-1,401.47	-1,537.17
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 122.66
Beta	2.416
Diluted Shares Outstanding	30.20
Cost of Debt
Tax Rate	23.88
After-tax Cost of Debt	3.13%
Risk-Free Rate
Market Risk Premium
Cost of Equity	15.514
Total Debt	3,615.40
Total Equity	3,704.33
Total Capital	7,319.73
Debt Weighting	49.39
Equity Weighting	50.61
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	1,976.70	1,999	1,781.30	2,073.10	2,738.80	3,003.99	3,294.85	3,613.88	3,963.79	4,347.59
EBITDA	650.70	720	669.20	868.60	1,189.70	1,152.58	1,264.18	1,386.59	1,520.84	1,668.10
EBIT	205.90	249.90	202.80	379.90	558.90	438.79	481.28	527.88	578.99	635.05
Tax Rate	-0.44%	25.31%	21.68%	22.83%	23.88%	18.65%	18.65%	18.65%	18.65%	18.65%
EBIAT	206.80	186.64	158.83	293.17	425.43	356.94	391.50	429.41	470.98	516.59
Depreciation	444.80	470.10	466.40	488.70	630.80	713.79	782.91	858.71	941.86	1,033.05
Accounts Receivable	-	25.70	5.50	-86.90	-134.40	0.61	-50.53	-55.43	-60.79	-66.68
Inventories	-	-0.20	1.97	-2.64	-6.03	-2.40	-2.63	-2.89	-3.17	-3.48
Accounts Payable	-	-20.50	-0.70	154.80	37.70	-42.03	26.75	29.34	32.18	35.30
Capital Expenditure	-849	-695.30	-385.50	-641.80	-1,272.20	-1,062.11	-1,164.95	-1,277.75	-1,401.47	-1,537.17
UFCF	-197.40	-33.56	246.51	205.32	-318.70	-35.20	-16.96	-18.61	-20.41	-22.38
WACC
PV UFCF						-32.18	-14.17	-14.21	-14.25	-14.28
SUM PV UFCF										-89.09

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.40
Free cash flow (t + 1)	-22.83
Terminal Value	-308.52
Present Value of Terminal Value	-196.88

Intrinsic Value

Enterprise Value	-285.97
Net Debt	3,561.90
Equity Value	-3,847.87
Shares Outstanding	30.20
Equity Value Per Share	-127.41