Discounted Cash Flow (DCF) Analysis Unlevered

The Interpublic Group of Companies,... (IPG)

$38.67

+0.92 (+2.44%)

All numbers are in Millions, Currency in USD

Stock DCF: 45.02 | 38.67 | 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	9,714.40	10,221.30	9,061	10,240.70	10,927.80	11,299.22	11,683.26	12,080.35	12,490.94	12,915.48
Revenue (%)
EBITDA	1,144	1,338.60	841.90	1,661.50	1,705.10	1,491.31	1,542	1,594.41	1,648.60	1,704.63
EBITDA (%)
EBIT	941.10	1,060.10	551.30	1,377.70	1,431.10	1,190.77	1,231.24	1,273.09	1,316.36	1,361.10
EBIT (%)
Depreciation	202.90	278.50	290.60	283.80	274	300.54	310.76	321.32	332.24	343.53
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	673.40	1,192.20	2,509	3,270	2,545.30	2,293.95	2,371.92	2,452.54	2,535.89	2,622.08
Total Cash (%)
Account Receivables	7,027.20	7,143.30	6,467.10	7,524.90	7,339	8,005.19	8,277.27	8,558.60	8,849.50	9,150.27
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	6,698.10	7,205.40	7,269.70	8,960	8,235.30	8,644.58	8,938.39	9,242.19	9,556.31	9,881.12
Accounts Payable (%)
Capital Expenditure	-177.10	-198.50	-167.50	-195.30	-178.10	-206.79	-213.82	-221.08	-228.60	-236.37
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 38.67
Beta	1.116
Diluted Shares Outstanding	395.10
Cost of Debt
Tax Rate	26.08
After-tax Cost of Debt	2.85%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.959
Total Debt	4,531.60
Total Equity	15,278.52
Total Capital	19,810.12
Debt Weighting	22.88
Equity Weighting	77.12
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	9,714.40	10,221.30	9,061	10,240.70	10,927.80	11,299.22	11,683.26	12,080.35	12,490.94	12,915.48
EBITDA	1,144	1,338.60	841.90	1,661.50	1,705.10	1,491.31	1,542	1,594.41	1,648.60	1,704.63
EBIT	941.10	1,060.10	551.30	1,377.70	1,431.10	1,190.77	1,231.24	1,273.09	1,316.36	1,361.10
Tax Rate	26.15%	25.31%	2.82%	22.04%	26.08%	20.48%	20.48%	20.48%	20.48%	20.48%
EBIAT	695.04	791.79	535.74	1,074.11	1,057.90	946.92	979.10	1,012.38	1,046.79	1,082.37
Depreciation	202.90	278.50	290.60	283.80	274	300.54	310.76	321.32	332.24	343.53
Accounts Receivable	-	-116.10	676.20	-1,057.80	185.90	-666.19	-272.08	-281.33	-290.89	-300.78
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	507.30	64.30	1,690.30	-724.70	409.28	293.81	303.80	314.13	324.80
Capital Expenditure	-177.10	-198.50	-167.50	-195.30	-178.10	-206.79	-213.82	-221.08	-228.60	-236.37
UFCF	720.84	1,262.99	1,399.34	1,795.11	615	783.75	1,097.77	1,135.08	1,173.66	1,213.55
WACC
PV UFCF						728.67	948.88	912.17	876.88	842.96
SUM PV UFCF										4,309.55

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.56
Free cash flow (t + 1)	1,237.83
Terminal Value	22,263.04
Present Value of Terminal Value	15,464.31

Intrinsic Value

Enterprise Value	19,773.86
Net Debt	1,986.30
Equity Value	17,787.56
Shares Outstanding	395.10
Equity Value Per Share	45.02