Discounted Cash Flow (DCF) Analysis Unlevered

Mohawk Industries, Inc. (MHK)

$100.22

+3.86 (+4.01%)

All numbers are in Millions, Currency in USD

Stock DCF: 143.55 | 100.22 | 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	9,983.63	9,970.67	9,552.20	11,200.61	11,737.07	12,257	12,799.97	13,367	13,959.14	14,577.51
Revenue (%)
EBITDA	1,606.64	1,366.91	1,244.13	1,938.57	830.76	1,647.64	1,720.63	1,796.85	1,876.45	1,959.58
EBITDA (%)
EBIT	1,084.88	790.46	636.62	1,346.86	235.29	968.02	1,010.91	1,055.69	1,102.45	1,151.29
EBIT (%)
Depreciation	521.76	576.45	607.51	591.71	595.46	679.62	709.73	741.17	774	808.29
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	119.05	134.79	1,340.37	591.89	667.62	675.33	705.25	736.49	769.12	803.19
Total Cash (%)
Account Receivables	1,606.16	1,526.62	1,709.49	1,839.98	1,904.79	2,008.96	2,097.96	2,190.90	2,287.95	2,389.30
Account Receivables (%)
Inventories	2,287.61	2,282.33	1,913.02	2,391.67	2,793.77	2,720.74	2,841.26	2,967.13	3,098.57	3,235.83
Inventories (%)
Accounts Payable	811.88	824.96	1,016.90	1,228.62	1,094.04	1,160.54	1,211.95	1,265.64	1,321.71	1,380.26
Accounts Payable (%)
Capital Expenditure	-794.11	-545.46	-425.56	-676.12	-580.74	-707.58	-738.92	-771.66	-805.84	-841.54
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 100.22
Beta	1.280
Diluted Shares Outstanding	69.14
Cost of Debt
Tax Rate	86.27
After-tax Cost of Debt	0.22%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.533
Total Debt	3,220.54
Total Equity	6,929.71
Total Capital	10,150.25
Debt Weighting	31.73
Equity Weighting	68.27
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	9,983.63	9,970.67	9,552.20	11,200.61	11,737.07	12,257	12,799.97	13,367	13,959.14	14,577.51
EBITDA	1,606.64	1,366.91	1,244.13	1,938.57	830.76	1,647.64	1,720.63	1,796.85	1,876.45	1,959.58
EBIT	1,084.88	790.46	636.62	1,346.86	235.29	968.02	1,010.91	1,055.69	1,102.45	1,151.29
Tax Rate	17.87%	0.71%	11.77%	19.91%	86.27%	27.31%	27.31%	27.31%	27.31%	27.31%
EBIAT	891	784.83	561.69	1,078.70	32.30	703.69	734.86	767.42	801.41	836.91
Depreciation	521.76	576.45	607.51	591.71	595.46	679.62	709.73	741.17	774	808.29
Accounts Receivable	-	79.54	-182.87	-130.49	-64.80	-104.18	-88.99	-92.94	-97.05	-101.35
Inventories	-	5.29	369.31	-478.65	-402.09	73.03	-120.53	-125.86	-131.44	-137.26
Accounts Payable	-	13.08	191.94	211.72	-134.58	66.51	51.41	53.69	56.07	58.55
Capital Expenditure	-794.11	-545.46	-425.56	-676.12	-580.74	-707.58	-738.92	-771.66	-805.84	-841.54
UFCF	618.66	913.73	1,122.02	596.87	-554.45	711.09	547.56	571.81	597.14	623.60
WACC
PV UFCF						667.19	482.03	472.31	462.78	453.45
SUM PV UFCF										2,537.76

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.58
Free cash flow (t + 1)	636.07
Terminal Value	13,887.97
Present Value of Terminal Value	10,098.58

Intrinsic Value

Enterprise Value	12,636.33
Net Debt	2,710.91
Equity Value	9,925.42
Shares Outstanding	69.14
Equity Value Per Share	143.55