Discounted Cash Flow (DCF) Analysis Unlevered

The Progressive Corporation (PGR)

$135.07

+0.16 (+0.12%)
All numbers are in Millions, Currency in USD
Stock DCF: 325.85 | 135.07 | undervalue

Operating Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 26,816.1031,954.7038,997.7042,638.1047,676.5055,108.6163,699.2973,629.1485,106.9198,373.91
Revenue (%)
EBITDA 2,522.203,586.805,646.407,7224,7666,967.508,053.649,309.0910,760.2512,437.63
EBITDA (%)
EBIT 2,286.103,324.405,340.307,390.204,428.606,529.687,547.568,724.1310,084.1011,656.07
EBIT (%)
Depreciation 236.10262.40306.10331.80337.40437.83506.08584.97676.15781.56
Depreciation (%)

Balance Sheet Data

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 23,336.1029,976.9035,135.3042,105.9045,002.8051,148.8459,122.2468,338.5878,991.6391,305.35
Total Cash (%)
Account Receivables 5,422.506,497.107,507.3012,179.5014,38013,064.0915,100.6017,454.5720,175.5023,320.59
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 2,825.905,046.505,962.704,955.806,010.607,257.878,389.279,697.0511,208.6812,955.96
Accounts Payable (%)
Capital Expenditure -155.70-266-363.50-223.50-243.50-372.54-430.62-497.74-575.33-665.02
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 135.07
Beta 0.481
Diluted Shares Outstanding 584.70
Cost of Debt
Tax Rate 20.41
After-tax Cost of Debt 3.55%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.790
Total Debt 4,898.80
Total Equity 78,975.43
Total Capital 83,874.23
Debt Weighting 5.84
Equity Weighting 94.16
Wacc

Build Up Free Cash

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 26,816.1031,954.7038,997.7042,638.1047,676.5055,108.6163,699.2973,629.1485,106.9198,373.91
EBITDA 2,522.203,586.805,646.407,7224,7666,967.508,053.649,309.0910,760.2512,437.63
EBIT 2,286.103,324.405,340.307,390.204,428.606,529.687,547.568,724.1310,084.1011,656.07
Tax Rate 25.56%17.33%23.06%20.47%20.41%21.37%21.37%21.37%21.37%21.37%
EBIAT 1,701.782,748.234,108.795,877.173,524.895,134.525,934.936,860.107,929.509,165.59
Depreciation 236.10262.40306.10331.80337.40437.83506.08584.97676.15781.56
Accounts Receivable --1,074.60-1,010.20-4,672.20-2,200.501,315.91-2,036.51-2,353.98-2,720.93-3,145.08
Inventories ----------
Accounts Payable -2,220.60916.20-1,006.901,054.801,247.271,131.401,307.771,511.641,747.28
Capital Expenditure -155.70-266-363.50-223.50-243.50-372.54-430.62-497.74-575.33-665.02
UFCF 1,782.183,890.633,957.39306.372,473.097,762.995,105.285,901.126,821.027,884.33
WACC
PV UFCF 7,347.144,572.975,002.685,472.775,987.03
SUM PV UFCF 28,382.59

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.66
Free cash flow (t + 1) 8,042.01
Terminal Value 219,727.16
Present Value of Terminal Value 166,851.73

Intrinsic Value

Enterprise Value 195,234.32
Net Debt 4,711.70
Equity Value 190,522.62
Shares Outstanding 584.70
Equity Value Per Share 325.85