Discounted Cash Flow (DCF) Analysis Unlevered

Kontoor Brands, Inc. (KTB)

$43.71

-1.08 (-2.41%)

All numbers are in Millions, Currency in USD

Stock DCF: 35.54 | 43.71 | overvalue

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	2,830.11	2,764	2,548.84	2,419.86	2,297.42	2,181.17	2,070.80	1,966.01	1,866.53	1,772.08	1,682.41
Revenue (%)
EBITDA	394.04	371.11	201.74	284.45	270.06	256.40	243.42	231.10	219.41	208.31	197.77
EBITDA (%)
EBIT	360.42	340.08	170.98	256.08	243.12	230.82	219.14	208.05	197.52	187.53	178.04
EBIT (%)
Depreciation	33.63	31.03	30.76	28.38	26.94	25.58	24.28	23.05	21.89	20.78	19.73
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	80.81	96.78	106.81	85.08	80.77	76.68	72.80	69.12	65.62	62.30	59.15
Total Cash (%)
Account Receivables	1,016.97	1,318.60	228.46	746.96	709.16	673.28	639.21	606.86	576.16	547	519.32
Account Receivables (%)
Inventories	440.30	473.81	458.10	408.74	388.06	368.42	349.78	332.08	315.27	299.32	284.18
Inventories (%)
Accounts Payable	174.35	134.13	147.35	135.47	128.61	122.10	115.93	110.06	104.49	99.20	94.18
Accounts Payable (%)
Capital Expenditure	-26.46	-22.70	-37.49	-26.03	-24.71	-23.46	-22.28	-21.15	-20.08	-19.06	-18.10
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 43.71
Beta	1.167
Diluted Shares Outstanding	59.09
Cost of Debt
Tax Rate	20.11
After-tax Cost of Debt	3.66%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.105
Total Debt	848.75
Total Equity	2,582.65
Total Capital	3,431.40
Debt Weighting	24.73
Equity Weighting	75.27
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	2,830.11	2,764	2,548.84	2,419.86	2,297.42	2,181.17	2,070.80	1,966.01	1,866.53	1,772.08	1,682.41
EBITDA	394.04	371.11	201.74	284.45	270.06	256.40	243.42	231.10	219.41	208.31	197.77
EBIT	360.42	340.08	170.98	256.08	243.12	230.82	219.14	208.05	197.52	187.53	178.04
Tax Rate	67.65%	22.64%	28.51%	29.16%	6.87%	20.11%	29.16%	29.16%	29.16%	29.16%	29.16%
EBIAT	116.60	263.07	122.24	181.42	226.41	184.41	155.25	147.39	139.93	132.85	126.13
Depreciation	33.63	31.03	30.76	28.38	26.94	25.58	24.28	23.05	21.89	20.78	19.73
Accounts Receivable	-	-301.63	1,090.14	-518.50	37.80	35.88	34.07	32.34	30.71	29.15	27.68
Inventories	-	-33.52	15.71	49.36	20.68	19.64	18.64	17.70	16.80	15.95	15.15
Accounts Payable	-	-40.22	13.22	-11.88	-6.85	-6.51	-6.18	-5.87	-5.57	-5.29	-5.02
Capital Expenditure	-26.46	-22.70	-37.49	-26.03	-62.39	-36.87	-22.28	-21.15	-20.08	-19.06	-18.10
UFCF	123.76	-103.96	1,234.58	-297.25	280.26	235.54	203.79	193.48	183.69	174.39	165.57
WACC
PV UFCF				-320.32	280.26	218.58	175.49	154.62	136.22	120.02	105.74
SUM PV UFCF											745.79

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.76
Free cash flow (t + 1)	168.88
Terminal Value	2,931.91
Present Value of Terminal Value	2,017.73

Intrinsic Value

Enterprise Value	2,763.52
Net Debt	663.43
Equity Value	2,100.09
Shares Outstanding	59.09
Equity Value Per Share	35.54