Discounted Cash Flow (DCF) Analysis Unlevered

Target Corporation (TGT)

$150.42

+3.61 (+2.46%)
All numbers are in Millions, Currency in USD
Stock DCF: 286.68 | 150.42 | 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 72,71475,35678,11293,561106,005116,703.33128,481.36141,448.07155,723.41171,439.46
Revenue (%)
EBITDA 6,7436,6187,2839,00811,97011,273.3712,411.1213,663.6815,042.6616,560.81
EBITDA (%)
EBIT 4,2984,1444,6796,5239,3287,742.498,523.899,384.1410,331.2111,373.87
EBIT (%)
Depreciation 2,4452,4742,6042,4852,6423,530.883,887.234,279.544,711.445,186.94
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 2,6431,5562,5778,5115,9115,525.126,082.736,696.627,372.468,116.51
Total Cash (%)
Account Receivables 9291,1009621,1351,373.301,511.901,664.481,832.472,017.412,221.01
Account Receivables (%)
Inventories 8,5979,4978,99210,65313,90214,106.6715,530.3617,097.7318,823.2820,722.98
Inventories (%)
Accounts Payable 8,6779,7619,92012,85915,47815,388.7616,941.8418,651.6620,534.0422,606.39
Accounts Payable (%)
Capital Expenditure -2,533-3,516-3,027-2,649-3,544-4,247.79-4,676.49-5,148.46-5,668.06-6,240.09
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 150.42
Beta 0.966
Diluted Shares Outstanding 492.70
Cost of Debt
Tax Rate 22.02
After-tax Cost of Debt 2.03%
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.687
Total Debt 16,213
Total Equity 74,111.93
Total Capital 90,324.93
Debt Weighting 17.95
Equity Weighting 82.05
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 72,71475,35678,11293,561106,005116,703.33128,481.36141,448.07155,723.41171,439.46
EBITDA 6,7436,6187,2839,00811,97011,273.3712,411.1213,663.6815,042.6616,560.81
EBIT 4,2984,1444,6796,5239,3287,742.498,523.899,384.1410,331.2111,373.87
Tax Rate 19.72%20.10%21.69%21.24%22.02%20.96%20.96%20.96%20.96%20.96%
EBIAT 3,450.243,310.923,663.915,137.487,274.316,119.986,737.637,417.618,166.228,990.38
Depreciation 2,4452,4742,6042,4852,6423,530.883,887.234,279.544,711.445,186.94
Accounts Receivable --171138-173-238.30-138.60-152.59-167.98-184.94-203.60
Inventories --900505-1,661-3,249-204.67-1,423.69-1,567.37-1,725.55-1,899.70
Accounts Payable -1,0841592,9392,619-89.241,553.081,709.821,882.382,072.35
Capital Expenditure -2,533-3,516-3,027-2,649-3,544-4,247.79-4,676.49-5,148.46-5,668.06-6,240.09
UFCF 3,362.242,281.924,042.916,078.485,504.014,970.565,925.176,523.167,181.507,906.27
WACC
PV UFCF 4,659.765,207.355,374.415,546.845,724.80
SUM PV UFCF 26,513.16

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.67
Free cash flow (t + 1) 8,064.40
Terminal Value 172,685.20
Present Value of Terminal Value 125,038.47

Intrinsic Value

Enterprise Value 151,551.63
Net Debt 10,302
Equity Value 141,249.63
Shares Outstanding 492.70
Equity Value Per Share 286.68