Discounted Cash Flow (DCF) Analysis Unlevered

Warner Bros. Discovery, Inc. (WBD)

$13.12

+1.02 (+8.43%)
All numbers are in Millions, Currency in USD
Stock DCF: 1,288.01 | 13.12 | 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 10,55311,14410,67112,19133,81750,133.1374,321.52110,180.40163,340.58242,149.64
Revenue (%)
EBITDA 6,3507,0276,5556,95814,09728,417.2642,128.1162,454.2292,587.32137,259.14
EBITDA (%)
EBIT 1,6642,8272,2401,875-7,2575,619.728,331.1412,350.7818,309.8227,144
EBIT (%)
Depreciation 4,6864,2004,3155,08321,35422,797.5433,796.9750,103.4474,277.50110,115.14
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 9861,5522,0913,9053,7318,615.8812,772.9018,935.6028,071.7141,615.84
Total Cash (%)
Account Receivables 2,6202,6332,5372,4467,61111,510.4917,064.1125,297.2537,502.7555,597.20
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 3254633974121,4541,868.352,769.804,106.186,087.359,024.39
Accounts Payable (%)
Capital Expenditure -147-289-402-373-987-1,376.84-2,041.14-3,025.95-4,485.92-6,650.30
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 13.12
Beta 1.476
Diluted Shares Outstanding 1,940
Cost of Debt
Tax Rate 17.73
After-tax Cost of Debt 2.99%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.753
Total Debt 48,999
Total Equity 25,452.80
Total Capital 74,451.80
Debt Weighting 65.81
Equity Weighting 34.19
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 10,55311,14410,67112,19133,81750,133.1374,321.52110,180.40163,340.58242,149.64
EBITDA 6,3507,0276,5556,95814,09728,417.2642,128.1162,454.2292,587.32137,259.14
EBIT 1,6642,8272,2401,875-7,2575,619.728,331.1412,350.7818,309.8227,144
Tax Rate 41.88%9.81%29.46%29.80%17.73%25.73%25.73%25.73%25.73%25.73%
EBIAT 967.142,549.721,580.191,316.29-5,970.024,173.496,187.139,172.3113,597.7920,158.50
Depreciation 4,6864,2004,3155,08321,35422,797.5433,796.9750,103.4474,277.50110,115.14
Accounts Receivable --139691-5,165-3,899.49-5,553.62-8,233.14-12,205.50-18,094.44
Inventories ----------
Accounts Payable -138-66151,042414.35901.451,336.381,981.162,937.04
Capital Expenditure -147-289-402-373-987-1,376.84-2,041.14-3,025.95-4,485.92-6,650.30
UFCF 5,506.146,585.725,523.196,132.2910,273.9822,109.0633,290.7949,353.0473,165.04108,465.94
WACC
PV UFCF 20,928.6829,830.9741,862.8458,747.5982,442.55
SUM PV UFCF 233,812.62

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.64
Free cash flow (t + 1) 110,635.26
Terminal Value 3,039,430.12
Present Value of Terminal Value 2,310,203.30

Intrinsic Value

Enterprise Value 2,544,015.92
Net Debt 45,268
Equity Value 2,498,747.92
Shares Outstanding 1,940
Equity Value Per Share 1,288.01