Discounted Cash Flow (DCF) Analysis Unlevered

International Paper Company (IP)

$34.145

+0.03 (+0.07%)

All numbers are in Millions, Currency in USD

Stock DCF: 58.99 | 34.145 | undervalue

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	23,306	22,376	20,580	19,363	21,161	20,703.68	20,256.24	19,818.47	19,390.17	18,971.12
Revenue (%)
EBITDA	3,796	3,695	3,006	2,876	2,976	3,160.37	3,092.07	3,025.25	2,959.87	2,895.90
EBITDA (%)
EBIT	2,468	2,389	1,719	1,666	1,936	1,961.54	1,919.15	1,877.68	1,837.10	1,797.39
EBIT (%)
Depreciation	1,328	1,306	1,287	1,210	1,040	1,198.83	1,172.92	1,147.57	1,122.77	1,098.51
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	589	511	5,445	1,540	804	1,781.40	1,742.90	1,705.24	1,668.39	1,632.33
Total Cash (%)
Account Receivables	3,916	3,673	3,419	3,610	3,765	3,572.07	3,494.88	3,419.35	3,345.45	3,273.15
Account Receivables (%)
Inventories	2,241	2,208	2,050	1,814	1,942	1,987.14	1,944.20	1,902.18	1,861.07	1,820.85
Inventories (%)
Accounts Payable	2,413	2,423	2,320	2,606	2,708	2,431.07	2,378.53	2,327.12	2,276.83	2,227.63
Accounts Payable (%)
Capital Expenditure	-1,572	-1,276	-751	-549	-931	-966.10	-945.22	-924.80	-904.81	-885.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 34.145
Beta	1.032
Diluted Shares Outstanding	392.40
Cost of Debt
Tax Rate	0.46
After-tax Cost of Debt	5.51%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.157
Total Debt	5,862
Total Equity	13,398.50
Total Capital	19,260.50
Debt Weighting	30.44
Equity Weighting	69.56
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	23,306	22,376	20,580	19,363	21,161	20,703.68	20,256.24	19,818.47	19,390.17	18,971.12
EBITDA	3,796	3,695	3,006	2,876	2,976	3,160.37	3,092.07	3,025.25	2,959.87	2,895.90
EBIT	2,468	2,389	1,719	1,666	1,936	1,961.54	1,919.15	1,877.68	1,837.10	1,797.39
Tax Rate	-12.97%	39.53%	25.85%	18.82%	0.46%	14.34%	14.34%	14.34%	14.34%	14.34%
EBIAT	2,788.11	1,444.72	1,274.70	1,352.48	1,927.03	1,680.32	1,644.01	1,608.48	1,573.72	1,539.71
Depreciation	1,328	1,306	1,287	1,210	1,040	1,198.83	1,172.92	1,147.57	1,122.77	1,098.51
Accounts Receivable	-	243	254	-191	-155	192.93	77.20	75.53	73.90	72.30
Inventories	-	33	158	236	-128	-45.14	42.95	42.02	41.11	40.22
Accounts Payable	-	10	-103	286	102	-276.93	-52.54	-51.40	-50.29	-49.21
Capital Expenditure	-1,572	-1,276	-751	-549	-931	-966.10	-945.22	-924.80	-904.81	-885.26
UFCF	2,544.11	1,760.72	2,119.70	2,344.48	1,855.03	1,783.90	1,939.31	1,897.40	1,856.39	1,816.27
WACC
PV UFCF						1,651	1,661.11	1,504.12	1,361.98	1,233.27
SUM PV UFCF										7,411.47

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.05
Free cash flow (t + 1)	1,852.60
Terminal Value	30,621.44
Present Value of Terminal Value	20,792.26

Intrinsic Value

Enterprise Value	28,203.73
Net Debt	5,058
Equity Value	23,145.73
Shares Outstanding	392.40
Equity Value Per Share	58.99