Discounted Cash Flow (DCF) Analysis Unlevered

Novartis AG (NVS)

$83.67

+0.24 (+0.29%)

All numbers are in Millions, Currency in USD

Stock DCF: 213.05 | 83.67 | 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	53,166	48,677	49,898	52,877	51,828	51,575.51	51,324.25	51,074.22	50,825.40	50,577.80
Revenue (%)
EBITDA	21,681	20,201	17,212	33,064	16,389	21,757.25	21,651.26	21,545.78	21,440.82	21,336.37
EBITDA (%)
EBIT	14,789	14,375	10,748	26,951	9,208	15,227.53	15,153.35	15,079.53	15,006.07	14,932.96
EBIT (%)
Depreciation	6,892	5,826	6,464	6,113	7,181	6,529.72	6,497.91	6,466.25	6,434.75	6,403.40
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	15,964	11,446	11,293	28,113	18,615	17,046.40	16,963.36	16,880.72	16,798.48	16,716.64
Total Cash (%)
Account Receivables	11,024	10,337	10,036	9,621	8,066	9,886.21	9,838.04	9,790.12	9,742.42	9,694.96
Account Receivables (%)
Inventories	6,956	5,982	7,242	6,666	7,175	6,842.71	6,809.37	6,776.20	6,743.19	6,710.34
Inventories (%)
Accounts Payable	5,556	5,424	5,403	5,553	5,146	5,451.73	5,425.17	5,398.74	5,372.44	5,346.27
Accounts Payable (%)
Capital Expenditure	-3,355	-2,257	-2,585	-2,971	-2,671	-2,774.76	-2,761.24	-2,747.79	-2,734.40	-2,721.08
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 83.67
Beta	0.457
Diluted Shares Outstanding	2,260
Cost of Debt
Tax Rate	16.92
After-tax Cost of Debt	2.49%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.764
Total Debt	27,909
Total Equity	189,094.20
Total Capital	217,003.20
Debt Weighting	12.86
Equity Weighting	87.14
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	53,166	48,677	49,898	52,877	51,828	51,575.51	51,324.25	51,074.22	50,825.40	50,577.80
EBITDA	21,681	20,201	17,212	33,064	16,389	21,757.25	21,651.26	21,545.78	21,440.82	21,336.37
EBIT	14,789	14,375	10,748	26,951	9,208	15,227.53	15,153.35	15,079.53	15,006.07	14,932.96
Tax Rate	8.85%	-31.23%	18.28%	8.10%	16.92%	4.18%	4.18%	4.18%	4.18%	4.18%
EBIAT	13,480.60	18,864.37	8,782.94	24,769.10	7,650.42	14,590.69	14,519.60	14,448.87	14,378.48	14,308.43
Depreciation	6,892	5,826	6,464	6,113	7,181	6,529.72	6,497.91	6,466.25	6,434.75	6,403.40
Accounts Receivable	-	687	301	415	1,555	-1,820.21	48.16	47.93	47.69	47.46
Inventories	-	974	-1,260	576	-509	332.29	33.34	33.17	33.01	32.85
Accounts Payable	-	-132	-21	150	-407	305.73	-26.56	-26.43	-26.30	-26.17
Capital Expenditure	-3,355	-2,257	-2,585	-2,971	-2,671	-2,774.76	-2,761.24	-2,747.79	-2,734.40	-2,721.08
UFCF	17,017.60	23,962.37	11,681.94	29,052.10	12,799.42	17,163.46	18,311.21	18,222.01	18,133.23	18,044.90
WACC
PV UFCF						16,293.39	16,501.77	15,588.93	14,726.58	13,911.94
SUM PV UFCF										77,022.62

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.34
Free cash flow (t + 1)	18,405.79
Terminal Value	551,071.65
Present Value of Terminal Value	424,855.75

Intrinsic Value

Enterprise Value	501,878.36
Net Debt	20,392
Equity Value	481,486.36
Shares Outstanding	2,260
Equity Value Per Share	213.05