Discounted Cash Flow (DCF) Analysis Unlevered

Laboratory Corporation of America H... (LH)

$217.87

+0.85 (+0.39%)

All numbers are in Millions, Currency in USD

Stock DCF: 369.46 | 217.87 | 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	11,333.40	11,554.80	13,978.50	16,120.90	14,876.80	16,012.58	17,235.07	18,550.90	19,967.18	21,491.59
Revenue (%)
EBITDA	2,105.20	1,968.60	3,543.60	4,116.70	2,743.20	3,360.67	3,617.24	3,893.41	4,190.65	4,510.59
EBITDA (%)
EBIT	1,553.10	1,391.40	2,918.90	3,371.60	2,109.30	2,617.09	2,816.89	3,031.95	3,263.43	3,512.58
EBIT (%)
Depreciation	552.10	577.20	624.70	745.10	633.90	743.58	800.35	861.46	927.22	998.01
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	426.80	337.50	1,320.80	1,472.70	430	901.87	970.72	1,044.83	1,124.60	1,210.46
Total Cash (%)
Account Receivables	1,862.30	2,025.30	3,016.60	2,978.30	3,017.40	3,019.89	3,250.44	3,498.60	3,765.71	4,053.20
Account Receivables (%)
Inventories	237.30	244.70	423.20	401.40	470.60	412.88	444.40	478.33	514.85	554.15
Inventories (%)
Accounts Payable	634.60	632.30	638.90	621.30	934.80	825.60	888.63	956.48	1,029.50	1,108.10
Accounts Payable (%)
Capital Expenditure	-379.80	-400.20	-381.70	-460.40	-481.90	-500.89	-539.13	-580.29	-624.59	-672.28
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 217.87
Beta	1.052
Diluted Shares Outstanding	97.50
Cost of Debt
Tax Rate	19.18
After-tax Cost of Debt	3.35%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.108
Total Debt	6,294.90
Total Equity	21,242.33
Total Capital	27,537.22
Debt Weighting	22.86
Equity Weighting	77.14
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	11,333.40	11,554.80	13,978.50	16,120.90	14,876.80	16,012.58	17,235.07	18,550.90	19,967.18	21,491.59
EBITDA	2,105.20	1,968.60	3,543.60	4,116.70	2,743.20	3,360.67	3,617.24	3,893.41	4,190.65	4,510.59
EBIT	1,553.10	1,391.40	2,918.90	3,371.60	2,109.30	2,617.09	2,816.89	3,031.95	3,263.43	3,512.58
Tax Rate	30.32%	25.44%	29.88%	23.97%	19.18%	25.76%	25.76%	25.76%	25.76%	25.76%
EBIAT	1,082.14	1,037.41	2,046.82	2,563.59	1,704.79	1,943.01	2,091.35	2,251.01	2,422.87	2,607.84
Depreciation	552.10	577.20	624.70	745.10	633.90	743.58	800.35	861.46	927.22	998.01
Accounts Receivable	-	-163	-991.30	38.30	-39.10	-2.49	-230.56	-248.16	-267.10	-287.50
Inventories	-	-7.40	-178.50	21.80	-69.20	57.72	-31.52	-33.93	-36.52	-39.31
Accounts Payable	-	-2.30	6.60	-17.60	313.50	-109.20	63.03	67.84	73.02	78.60
Capital Expenditure	-379.80	-400.20	-381.70	-460.40	-481.90	-500.89	-539.13	-580.29	-624.59	-672.28
UFCF	1,254.44	1,041.71	1,126.62	2,890.79	2,061.99	2,131.73	2,153.52	2,317.94	2,494.90	2,685.38
WACC
PV UFCF						1,977.67	1,853.50	1,850.83	1,848.16	1,845.49
SUM PV UFCF										9,375.65

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.79
Free cash flow (t + 1)	2,739.08
Terminal Value	47,307.13
Present Value of Terminal Value	32,511.29

Intrinsic Value

Enterprise Value	41,886.95
Net Debt	5,864.90
Equity Value	36,022.05
Shares Outstanding	97.50
Equity Value Per Share	369.46