Discounted Cash Flow (DCF) Analysis Unlevered

Johnson & Johnson (JNJ)

$176.94

-5.18 (-2.84%)

All numbers are in Millions, Currency in USD

Stock DCF: 181.43 | 176.94 | undervalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	76,450	81,581	82,059	85,053.13	88,156.50	91,373.11	94,707.08	98,162.71	101,744.42	105,456.81	109,304.67
Revenue (%)
EBITDA	24,249	25,933	24,655	26,523.04	27,490.80	28,493.87	29,533.54	30,611.14	31,728.07	32,885.75	34,085.66
EBITDA (%)
EBIT	18,607	19,004	17,646	19,601.19	20,316.39	21,057.68	21,826.02	22,622.40	23,447.84	24,303.39	25,190.16
EBIT (%)
Depreciation	5,642	6,929	7,009	6,921.85	7,174.41	7,436.19	7,707.52	7,988.74	8,280.23	8,582.36	8,895.51
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	18,296	19,687	19,287	20,290.17	21,030.51	21,797.86	22,593.21	23,417.58	24,272.03	25,157.65	26,075.59
Total Cash (%)
Account Receivables	13,490	14,098	14,481	14,905.15	15,449	16,012.70	16,596.96	17,202.54	17,830.22	18,480.80	19,155.12
Account Receivables (%)
Inventories	8,765	8,599	9,020	9,355.15	9,696.49	10,050.29	10,417	10,797.09	11,191.05	11,599.39	12,022.62
Inventories (%)
Accounts Payable	7,310	7,537	8,544	8,282.05	8,584.24	8,897.46	9,222.10	9,558.59	9,907.36	10,268.86	10,643.54
Accounts Payable (%)
Capital Expenditure	-3,279	-3,670	-3,498	-3,699.94	-3,834.94	-3,974.87	-4,119.90	-4,270.23	-4,426.04	-4,587.53	-4,754.92
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 176.94
Beta	0.658
Diluted Shares Outstanding	2,674
Cost of Debt
Tax Rate	8.33
After-tax Cost of Debt	0.50%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.313
Total Debt	33,751
Total Equity	473,137.56
Total Capital	506,888.56
Debt Weighting	6.66
Equity Weighting	93.34
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	76,450	81,581	82,059	85,053.13	88,156.50	91,373.11	94,707.08	98,162.71	101,744.42	105,456.81	109,304.67
EBITDA	24,249	25,933	24,655	26,523.04	27,490.80	28,493.87	29,533.54	30,611.14	31,728.07	32,885.75	34,085.66
EBIT	18,607	19,004	17,646	19,601.19	20,316.39	21,057.68	21,826.02	22,622.40	23,447.84	24,303.39	25,190.16
Tax Rate	92.64%	15.01%	12.75%	27.91%	10.81%	8.33%	27.91%	27.91%	27.91%	27.91%	27.91%
EBIAT	1,368.70	16,151.13	15,396.46	14,130.67	18,120.59	19,302.88	15,734.57	16,308.69	16,903.75	17,520.53	18,159.81
Depreciation	5,642	6,929	7,009	6,921.85	7,174.41	7,436.19	7,707.52	7,988.74	8,280.23	8,582.36	8,895.51
Accounts Receivable	-	-608	-383	-424.15	-543.85	-563.70	-584.26	-605.58	-627.68	-650.58	-674.32
Inventories	-	166	-421	-335.15	-341.35	-353.80	-366.71	-380.09	-393.96	-408.33	-423.23
Accounts Payable	-	227	1,007	-261.95	302.19	313.22	324.65	336.49	348.77	361.49	374.68
Capital Expenditure	-3,279	-3,670	-3,498	-3,699.94	-3,347	-3,652	-4,119.90	-4,270.23	-4,426.04	-4,587.53	-4,754.92
UFCF	3,731.70	19,195.13	19,110.46	16,331.33	20,877.05	22,159.91	18,695.86	19,378.02	20,085.08	20,817.93	21,577.52
WACC
PV UFCF				17,299.77	20,877.05	20,919.39	16,661.24	16,302.44	15,951.36	15,607.84	15,271.71
SUM PV UFCF											84,526.41

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.93
Free cash flow (t + 1)	22,009.08
Terminal Value	560,027.37
Present Value of Terminal Value	419,869.56

Intrinsic Value

Enterprise Value	504,395.97
Net Debt	19,264
Equity Value	485,131.97
Shares Outstanding	2,674
Equity Value Per Share	181.43