Discounted Cash Flow (DCF) Analysis Unlevered

Verizon Communications Inc. (VZ)

$37.43

+0.64 (+1.74%)

All numbers are in Millions, Currency in USD

Stock DCF: 131.37 | 37.43 | 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	130,863	131,868	128,292	133,613	136,835	138,413.80	140,010.81	141,626.25	143,260.33	144,913.27
Revenue (%)
EBITDA	41,348	43,622	44,387	48,558	48,491	47,352.66	47,899.02	48,451.68	49,010.71	49,576.19
EBITDA (%)
EBIT	23,945	26,940	27,667	32,352	31,392	29,744.47	30,087.66	30,434.81	30,785.97	31,141.18
EBIT (%)
Depreciation	17,403	16,682	16,720	16,206	17,099	17,608.19	17,811.36	18,016.86	18,224.74	18,435.02
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	2,745	2,594	22,171	2,921	2,605	7,041.48	7,122.72	7,204.90	7,288.03	7,372.12
Total Cash (%)
Account Receivables	25,102	25,429	23,917	23,846	24,506	25,707.44	26,004.05	26,304.08	26,607.58	26,914.57
Account Receivables (%)
Inventories	1,336	1,422	1,796	3,055	2,388	2,084.74	2,108.79	2,133.12	2,157.74	2,182.63
Inventories (%)
Accounts Payable	7,232	7,725	6,667	8,040	7,730.71	7,819.91	7,910.13	8,001.40	8,093.72	8,187.11
Accounts Payable (%)
Capital Expenditure	-18,087	-18,837	-20,318	-67,882	-26,740	-31,638.65	-32,003.70	-32,372.96	-32,746.47	-33,124.30
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 37.43
Beta	0.335
Diluted Shares Outstanding	4,150
Cost of Debt
Tax Rate	24.81
After-tax Cost of Debt	1.54%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.064
Total Debt	176,331
Total Equity	155,334.50
Total Capital	331,665.50
Debt Weighting	53.17
Equity Weighting	46.83
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	130,863	131,868	128,292	133,613	136,835	138,413.80	140,010.81	141,626.25	143,260.33	144,913.27
EBITDA	41,348	43,622	44,387	48,558	48,491	47,352.66	47,899.02	48,451.68	49,010.71	49,576.19
EBIT	23,945	26,940	27,667	32,352	31,392	29,744.47	30,087.66	30,434.81	30,785.97	31,141.18
Tax Rate	20.87%	15.26%	25.73%	25.00%	24.81%	22.33%	22.33%	22.33%	22.33%	22.33%
EBIAT	18,948.07	22,830.21	20,549.10	24,264	23,602.57	23,101.69	23,368.23	23,637.86	23,910.59	24,186.47
Depreciation	17,403	16,682	16,720	16,206	17,099	17,608.19	17,811.36	18,016.86	18,224.74	18,435.02
Accounts Receivable	-	-327	1,512	71	-660	-1,201.44	-296.61	-300.03	-303.50	-307
Inventories	-	-86	-374	-1,259	667	303.26	-24.05	-24.33	-24.61	-24.90
Accounts Payable	-	493	-1,058	1,373	-309.29	89.20	90.23	91.27	92.32	93.39
Capital Expenditure	-18,087	-18,837	-20,318	-67,882	-26,740	-31,638.65	-32,003.70	-32,372.96	-32,746.47	-33,124.30
UFCF	18,264.07	20,755.21	17,031.10	-27,227	13,659.28	8,262.25	8,945.45	9,048.66	9,153.07	9,258.68
WACC
PV UFCF						8,006.83	8,400.92	8,235.15	8,072.65	7,913.36
SUM PV UFCF										40,628.92

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	3.19
Free cash flow (t + 1)	9,443.85
Terminal Value	793,600.75
Present Value of Terminal Value	678,287.80

Intrinsic Value

Enterprise Value	718,916.72
Net Debt	173,726
Equity Value	545,190.72
Shares Outstanding	4,150
Equity Value Per Share	131.37