Discounted Cash Flow (DCF) Analysis Unlevered

Warner Bros. Discovery, Inc. (WBD)

$14.48

+0.14 (+0.98%)

All numbers are in Millions, Currency in USD

Stock DCF: 1,235.76 | 14.48 | 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	10,553	11,144	10,671	12,191	33,817	50,133.13	74,321.52	110,180.40	163,340.58	242,149.64
Revenue (%)
EBITDA	6,350	7,027	6,555	6,958	14,097	28,417.26	42,128.11	62,454.22	92,587.32	137,259.14
EBITDA (%)
EBIT	1,664	2,827	2,240	1,875	-7,257	5,619.72	8,331.14	12,350.78	18,309.82	27,144
EBIT (%)
Depreciation	4,686	4,200	4,315	5,083	21,354	22,797.54	33,796.97	50,103.44	74,277.50	110,115.14
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	986	1,552	2,091	3,905	3,731	8,615.88	12,772.90	18,935.60	28,071.71	41,615.84
Total Cash (%)
Account Receivables	2,620	2,633	2,537	2,446	7,611	11,510.49	17,064.11	25,297.25	37,502.75	55,597.20
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	325	463	397	412	1,454	1,868.35	2,769.80	4,106.18	6,087.35	9,024.39
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	$ 14.48
Beta	1.503
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	10.660
Total Debt	48,999
Total Equity	28,091.20
Total Capital	77,090.20
Debt Weighting	63.56
Equity Weighting	36.44
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	10,553	11,144	10,671	12,191	33,817	50,133.13	74,321.52	110,180.40	163,340.58	242,149.64
EBITDA	6,350	7,027	6,555	6,958	14,097	28,417.26	42,128.11	62,454.22	92,587.32	137,259.14
EBIT	1,664	2,827	2,240	1,875	-7,257	5,619.72	8,331.14	12,350.78	18,309.82	27,144
Tax Rate	41.88%	9.81%	29.46%	29.80%	17.73%	25.73%	25.73%	25.73%	25.73%	25.73%
EBIAT	967.14	2,549.72	1,580.19	1,316.29	-5,970.02	4,173.49	6,187.13	9,172.31	13,597.79	20,158.50
Depreciation	4,686	4,200	4,315	5,083	21,354	22,797.54	33,796.97	50,103.44	74,277.50	110,115.14
Accounts Receivable	-	-13	96	91	-5,165	-3,899.49	-5,553.62	-8,233.14	-12,205.50	-18,094.44
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	138	-66	15	1,042	414.35	901.45	1,336.38	1,981.16	2,937.04
Capital Expenditure	-147	-289	-402	-373	-987	-1,376.84	-2,041.14	-3,025.95	-4,485.92	-6,650.30
UFCF	5,506.14	6,585.72	5,523.19	6,132.29	10,273.98	22,109.06	33,290.79	49,353.04	73,165.04	108,465.94
WACC
PV UFCF						20,900.98	29,752.06	41,696.84	58,437.20	81,898.43
SUM PV UFCF										232,685.50

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.78
Free cash flow (t + 1)	110,635.26
Terminal Value	2,926,858.63
Present Value of Terminal Value	2,209,957.56

Intrinsic Value

Enterprise Value	2,442,643.06
Net Debt	45,268
Equity Value	2,397,375.06
Shares Outstanding	1,940
Equity Value Per Share	1,235.76