Discounted Cash Flow (DCF) Analysis Unlevered

Humana Inc. (HUM)

$476.57

-13.20 (-2.70%)

All numbers are in Millions, Currency in USD

Stock DCF: 1,236.14 | 476.57 | undervalue

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	53,767	56,912	64,888	77,155	83,064	92,705.12	103,465.27	115,474.33	128,877.27	143,835.87
Revenue (%)
EBITDA	4,747	2,826	4,287	5,573	4,457	6,116.69	6,826.64	7,619	8,503.33	9,490.30
EBITDA (%)
EBIT	4,262	2,292	3,712	4,957	3,744	5,303.99	5,919.62	6,606.70	7,373.53	8,229.37
EBIT (%)
Depreciation	485	534	575	616	713	812.70	907.03	1,012.30	1,129.80	1,260.93
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	13,599	12,369	15,026	17,227	16,586	20,854.64	23,275.21	25,976.73	28,991.81	32,356.85
Total Cash (%)
Account Receivables	854	1,015	1,056	1,138	1,814	1,605.29	1,791.61	1,999.56	2,231.64	2,490.67
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	11,660	8,148	9,964	12,156	12,798	15,300.31	17,076.20	19,058.20	21,270.26	23,739.07
Accounts Payable (%)
Capital Expenditure	-526	-612	-736	-964	-1,316	-1,116.48	-1,246.06	-1,390.69	-1,552.11	-1,732.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 476.57
Beta	0.740
Diluted Shares Outstanding	129.40
Cost of Debt
Tax Rate	12.55
After-tax Cost of Debt	2.22%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.109
Total Debt	12,820
Total Equity	61,666.25
Total Capital	74,486.25
Debt Weighting	17.21
Equity Weighting	82.79
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	53,767	56,912	64,888	77,155	83,064	92,705.12	103,465.27	115,474.33	128,877.27	143,835.87
EBITDA	4,747	2,826	4,287	5,573	4,457	6,116.69	6,826.64	7,619	8,503.33	9,490.30
EBIT	4,262	2,292	3,712	4,957	3,744	5,303.99	5,919.62	6,606.70	7,373.53	8,229.37
Tax Rate	39.10%	18.42%	21.67%	26.80%	12.55%	23.71%	23.71%	23.71%	23.71%	23.71%
EBIAT	2,595.37	1,869.82	2,907.52	3,628.31	3,274.05	4,046.38	4,516.04	5,040.21	5,625.22	6,278.13
Depreciation	485	534	575	616	713	812.70	907.03	1,012.30	1,129.80	1,260.93
Accounts Receivable	-	-161	-41	-82	-676	208.71	-186.32	-207.95	-232.09	-259.02
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	-3,512	1,816	2,192	642	2,502.31	1,775.89	1,982.01	2,212.06	2,468.81
Capital Expenditure	-526	-612	-736	-964	-1,316	-1,116.48	-1,246.06	-1,390.69	-1,552.11	-1,732.26
UFCF	2,554.37	-1,881.18	4,521.52	5,390.31	2,637.05	6,453.63	5,766.56	6,435.88	7,182.88	8,016.59
WACC
PV UFCF						6,072.86	5,106.17	5,362.61	5,631.91	5,914.75
SUM PV UFCF										28,088.30

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.27
Free cash flow (t + 1)	8,176.92
Terminal Value	191,496.97
Present Value of Terminal Value	141,289.05

Intrinsic Value

Enterprise Value	169,377.35
Net Debt	9,426
Equity Value	159,951.35
Shares Outstanding	129.40
Equity Value Per Share	1,236.14