Discounted Cash Flow (DCF) Analysis Unlevered

Stepan Company (SCL)

$108.61

+0.43 (+0.40%)

All numbers are in Millions, Currency in USD

Stock DCF: 53.59 | 108.61 | overvalue

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	1,925.01	1,993.86	1,858.74	1,869.75	2,345.97	2,480.05	2,621.79	2,771.64	2,930.05	3,097.52
Revenue (%)
EBITDA	231.81	233.65	216.28	259.62	263.32	300.12	317.27	335.40	354.57	374.84
EBITDA (%)
EBIT	152.79	152.53	137.58	177.76	172.45	197.64	208.94	220.88	233.51	246.85
EBIT (%)
Depreciation	79.02	81.12	78.70	81.86	90.88	102.47	108.33	114.52	121.07	127.98
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	298.89	300.19	315.38	380.59	159.19	370.47	391.65	414.03	437.70	462.71
Total Cash (%)
Account Receivables	293.54	280.02	276.84	275.40	345.54	365.29	386.17	408.24	431.57	456.24
Account Receivables (%)
Inventories	172.75	200.16	203.65	218.78	244.39	258.36	273.13	288.74	305.24	322.69
Inventories (%)
Accounts Payable	204.98	205.95	194.28	236.75	258.59	273.37	289	305.52	322.98	341.44
Accounts Payable (%)
Capital Expenditure	-78.61	-86.65	-105.57	-125.79	-388.96	-185.59	-196.20	-207.41	-219.27	-231.80
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 108.61
Beta	0.718
Diluted Shares Outstanding	23.22
Cost of Debt
Tax Rate	20.13
After-tax Cost of Debt	3.99%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.228
Total Debt	322.86
Total Equity	2,521.82
Total Capital	2,844.68
Debt Weighting	11.35
Equity Weighting	88.65
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	1,925.01	1,993.86	1,858.74	1,869.75	2,345.97	2,480.05	2,621.79	2,771.64	2,930.05	3,097.52
EBITDA	231.81	233.65	216.28	259.62	263.32	300.12	317.27	335.40	354.57	374.84
EBIT	152.79	152.53	137.58	177.76	172.45	197.64	208.94	220.88	233.51	246.85
Tax Rate	34.23%	19.41%	18.09%	25.89%	20.13%	23.55%	23.55%	23.55%	23.55%	23.55%
EBIAT	100.49	122.93	112.69	131.73	137.73	151.10	159.73	168.86	178.51	188.72
Depreciation	79.02	81.12	78.70	81.86	90.88	102.47	108.33	114.52	121.07	127.98
Accounts Receivable	-	13.52	3.18	1.44	-70.14	-19.75	-20.88	-22.07	-23.33	-24.67
Inventories	-	-27.42	-3.48	-15.14	-25.61	-13.97	-14.77	-15.61	-16.50	-17.45
Accounts Payable	-	0.98	-11.68	42.47	21.84	14.78	15.62	16.52	17.46	18.46
Capital Expenditure	-78.61	-86.65	-105.57	-125.79	-388.96	-185.59	-196.20	-207.41	-219.27	-231.80
UFCF	100.90	104.47	73.85	116.58	-234.26	49.04	51.84	54.81	57.94	61.25
WACC
PV UFCF						46.28	46.17	46.06	45.94	45.83
SUM PV UFCF										230.28

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.97
Free cash flow (t + 1)	62.47
Terminal Value	1,573.67
Present Value of Terminal Value	1,177.60

Intrinsic Value

Enterprise Value	1,407.88
Net Debt	163.68
Equity Value	1,244.20
Shares Outstanding	23.22
Equity Value Per Share	53.59