Discounted Cash Flow (DCF) Analysis Unlevered

3M Company (MMM)

$104.31

+1.29 (+1.25%)

All numbers are in Millions, Currency in USD

Stock DCF: 161.46 | 104.31 | 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	32,765	32,136	32,184	35,355	34,229	34,648.09	35,072.32	35,501.74	35,936.41	36,376.41
Revenue (%)
EBITDA	8,824	7,741	9,142	9,609	6,389	8,680.66	8,786.94	8,894.53	9,003.43	9,113.67
EBITDA (%)
EBIT	7,336	6,148	7,231	7,694	4,604.58	6,874.39	6,958.56	7,043.76	7,130	7,217.30
EBIT (%)
Depreciation	1,488	1,593	1,911	1,915	1,784.42	1,806.27	1,828.38	1,850.77	1,873.43	1,896.37
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	3,233	2,451	5,038	4,765	3,893	4,019.10	4,068.31	4,118.12	4,168.55	4,219.58
Total Cash (%)
Account Receivables	5,123	4,963	4,830	4,770	4,532	5,046.06	5,107.84	5,170.38	5,233.69	5,297.77
Account Receivables (%)
Inventories	4,366	4,134	4,239	4,985	5,372	4,792.15	4,850.82	4,910.21	4,970.33	5,031.19
Inventories (%)
Accounts Payable	2,266	2,228	2,561	2,994	3,183	2,742.32	2,775.89	2,809.88	2,844.28	2,879.11
Accounts Payable (%)
Capital Expenditure	-1,577	-1,699	-1,501	-1,603	-1,749	-1,691.35	-1,712.05	-1,733.02	-1,754.24	-1,775.71
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 104.31
Beta	0.963
Diluted Shares Outstanding	567.60
Cost of Debt
Tax Rate	9.62
After-tax Cost of Debt	4.52%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.027
Total Debt	16,200
Total Equity	59,206.36
Total Capital	75,406.36
Debt Weighting	21.48
Equity Weighting	78.52
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	32,765	32,136	32,184	35,355	34,229	34,648.09	35,072.32	35,501.74	35,936.41	36,376.41
EBITDA	8,824	7,741	9,142	9,609	6,389	8,680.66	8,786.94	8,894.53	9,003.43	9,113.67
EBIT	7,336	6,148	7,231	7,694	4,604.58	6,874.39	6,958.56	7,043.76	7,130	7,217.30
Tax Rate	23.59%	19.99%	19.77%	17.81%	9.62%	18.16%	18.16%	18.16%	18.16%	18.16%
EBIAT	5,605.75	4,918.83	5,801.18	6,323.73	4,161.56	5,626.23	5,695.12	5,764.85	5,835.43	5,906.88
Depreciation	1,488	1,593	1,911	1,915	1,784.42	1,806.27	1,828.38	1,850.77	1,873.43	1,896.37
Accounts Receivable	-	160	133	60	238	-514.06	-61.78	-62.54	-63.31	-64.08
Inventories	-	232	-105	-746	-387	579.85	-58.67	-59.39	-60.12	-60.86
Accounts Payable	-	-38	333	433	189	-440.68	33.58	33.99	34.40	34.82
Capital Expenditure	-1,577	-1,699	-1,501	-1,603	-1,749	-1,691.35	-1,712.05	-1,733.02	-1,754.24	-1,775.71
UFCF	5,516.75	5,166.83	6,572.18	6,382.73	4,236.97	5,366.26	5,724.57	5,794.66	5,865.61	5,937.42
WACC
PV UFCF						5,002.58	4,974.92	4,694.54	4,429.96	4,180.29
SUM PV UFCF										23,282.29

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.27
Free cash flow (t + 1)	6,056.17
Terminal Value	114,917.87
Present Value of Terminal Value	80,908.88

Intrinsic Value

Enterprise Value	104,191.16
Net Debt	12,545
Equity Value	91,646.16
Shares Outstanding	567.60
Equity Value Per Share	161.46