Discounted Cash Flow (DCF) Analysis Unlevered

The Kroger Co. (KR)

$47.19

+0.25 (+0.53%)
All numbers are in Millions, Currency in USD
Stock DCF: 95.97 | 47.19 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 115,337122,662121,162122,286124,754.45127,272.73129,841.84132,462.81135,136.69137,864.54140,647.46
Revenue (%)
EBITDA 5,7944,5397,0956,0206,082.606,205.386,330.656,458.446,588.806,721.816,857.49
EBITDA (%)
EBIT 3,4542,1034,6302,7313,357.083,424.843,493.983,564.513,636.463,709.863,784.75
EBIT (%)
Depreciation 2,3402,4362,4653,2892,725.522,780.542,836.672,893.932,952.353,011.943,072.74
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Actual
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Total Cash 644694858798774.99790.64806.60822.88839.49856.43873.72
Total Cash (%)
Account Receivables 1,6491,6371,5891,7061,706.281,740.721,775.861,811.711,848.281,885.591,923.65
Account Receivables (%)
Inventories 6,5616,5336,8467,0847,004.287,145.677,289.917,437.077,587.197,740.357,896.59
Inventories (%)
Accounts Payable 5,8185,8586,0596,3496,241.706,367.696,496.236,627.366,761.146,897.627,036.85
Accounts Payable (%)
Capital Expenditure -3,699-2,809-2,967-3,128-3,276.01-3,342.14-3,409.61-3,478.43-3,548.65-3,620.28-3,693.36
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 47.19
Beta 0.493
Diluted Shares Outstanding 805
Cost of Debt
Tax Rate 19.31
After-tax Cost of Debt 2.25%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.790
Total Debt 20,440
Total Equity 37,987.95
Total Capital 58,427.95
Debt Weighting 34.98
Equity Weighting 65.02
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
2027
Projected
Revenue 115,337122,662121,162122,286124,754.45127,272.73129,841.84132,462.81135,136.69137,864.54140,647.46
EBITDA 5,7944,5397,0956,0206,082.606,205.386,330.656,458.446,588.806,721.816,857.49
EBIT 3,4542,1034,6302,7313,357.083,424.843,493.983,564.513,636.463,709.863,784.75
Tax Rate 32.22%-28.50%21.82%16.25%12.22%19.31%12.22%12.22%12.22%12.22%12.22%
EBIAT 2,340.992,702.443,619.732,287.092,946.832,763.593,0673,128.913,192.073,256.503,322.24
Depreciation 2,3402,4362,4653,2892,725.522,780.542,836.672,893.932,952.353,011.943,072.74
Accounts Receivable -1248-117-0.28-34.44-35.14-35.85-36.57-37.31-38.06
Inventories -28-313-23879.71-141.39-144.24-147.15-150.12-153.15-156.25
Accounts Payable -40201290-107.30125.99128.54131.13133.78136.48139.23
Capital Expenditure -3,699-2,809-2,967-3,128-3,276.01-2,614-3,409.61-3,478.43-3,548.65-3,620.28-3,693.36
UFCF 981.992,409.443,053.732,383.092,368.472,152.152,443.222,492.542,542.852,594.182,646.55
WACC
PV UFCF 2,368.472,058.492,235.192,181.072,128.262,076.732,026.45
SUM PV UFCF 11,132.17

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.55
Free cash flow (t + 1) 2,699.48
Terminal Value 105,861.88
Present Value of Terminal Value 84,746.04

Intrinsic Value

Enterprise Value 95,878.21
Net Debt 18,619
Equity Value 77,259.21
Shares Outstanding 805
Equity Value Per Share 95.97