Discounted Cash Flow (DCF) Analysis Unlevered

TransAlta Corporation (TAC)

$8.47

-0.49 (-5.47%)
All numbers are in Millions, Currency in USD
Stock DCF: 16.58 | 8.47 | 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 2,3072,2492,3472,1012,7212,862.983,012.373,169.553,334.943,508.95
Revenue (%)
EBITDA 821706997660442899.64946.59995.981,047.951,102.63
EBITDA (%)
EBIT 113-4288-138-2771.391.461.541.621.70
EBIT (%)
Depreciation 708710709798719898.25945.12994.441,046.331,100.92
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 31489411703947591.74622.62655.10689.29725.25
Total Cash (%)
Account Receivables 933756462583651832.64876.09921.80969.901,020.51
Account Receivables (%)
Inventories 219242251238167277.21291.68306.90322.91339.76
Inventories (%)
Accounts Payable 595497413599689683.21718.86756.37795.84837.37
Accounts Payable (%)
Capital Expenditure -389-297-431-500-489-516.49-543.44-571.79-601.63-633.02
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 8.47
Beta 1.146
Diluted Shares Outstanding 275
Cost of Debt
Tax Rate -41.32
After-tax Cost of Debt 6.58%
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.201
Total Debt 3,267
Total Equity 2,329.25
Total Capital 5,596.25
Debt Weighting 58.38
Equity Weighting 41.62
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 2,3072,2492,3472,1012,7212,862.983,012.373,169.553,334.943,508.95
EBITDA 821706997660442899.64946.59995.981,047.951,102.63
EBIT 113-4288-138-2771.391.461.541.621.70
Tax Rate -196.30%-106.25%57.51%5.28%-41.32%-56.21%-56.21%-56.21%-56.21%-56.21%
EBIAT 334.81-8.25122.36-130.71-391.442.172.292.412.532.66
Depreciation 708710709798719898.25945.12994.441,046.331,100.92
Accounts Receivable -177294-121-68-181.64-43.45-45.71-48.10-50.61
Inventories --23-91371-110.21-14.46-15.22-16.01-16.85
Accounts Payable --98-8418690-5.7935.6537.5139.4741.53
Capital Expenditure -389-297-431-500-489-516.49-543.44-571.79-601.63-633.02
UFCF 653.81460.75601.36245.29-68.4486.30381.71401.63422.58444.63
WACC
PV UFCF 80.15329.26321.76314.44307.28
SUM PV UFCF 1,352.89

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.67
Free cash flow (t + 1) 453.53
Terminal Value 7,998.68
Present Value of Terminal Value 5,527.71

Intrinsic Value

Enterprise Value 6,880.59
Net Debt 2,320
Equity Value 4,560.59
Shares Outstanding 275
Equity Value Per Share 16.58