DCF Tool

ABB

ABB Ltd. – Switchgear and Switchboard Apparatus Manufacturing
ABB is a Swedish-Swiss multinational corporation headquartered in Zürich, Switzerland. The company was formed in 1988 when Swedens Allmänna Svenska Elektriska Aktiebolaget and Switzerlands Brown, Boveri & Cie merged to create ASEA Brown Boveri, later simplified to the initials ABB.
Analysis Results
Intrinsic Value $17.46
Latest Price $33.27
Relative Value 91% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -7.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -7.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 1.54 1.49
2024 1.42 1.34
2025 1.32 1.2
2026 1.22 1.08
2027 1.13 0.969
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 33.8 billion. This corresponds to a present value of 28.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.08 billion. Adding in the terminal value gives a total present value of 34.3 billion.

There are presently 1.96 billion outstanding shares, so the intrinsic value per share is 17.46.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 19,570,000,000
Current Cash 4,881,000,000
Current Liabilities 16,529,000,000
Current Debt 2,535,000,000
Non-Cash Working Capital (NCWC) 695,000,000
Change in NCWC 1,513,000,000
EBIT 3,310,000,000
Tax Provision 757,000,000
Depreciation and Amortization 814,000,000
Capital Expenditure -762,000,000
Unlevered Free Cash Flow 4,136,735,415
Current Assets 18,695,000,000
Current Cash 5,329,000,000
Current Liabilities 15,568,000,000
Current Debt 1,384,000,000
Non-Cash Working Capital (NCWC) -818,000,000
Change in NCWC -535,000,000
EBIT 2,986,000,000
Tax Provision 1,057,000,000
Depreciation and Amortization 893,000,000
Capital Expenditure -820,000,000
Unlevered Free Cash Flow 1,978,604,803
Current Assets 19,226,000,000
Current Cash 5,386,000,000
Current Liabilities 15,416,000,000
Current Debt 1,293,000,000
Non-Cash Working Capital (NCWC) -283,000,000
Change in NCWC -4,652,000,000
EBIT 1,790,000,000
Tax Provision 496,000,000
Depreciation and Amortization 915,000,000
Capital Expenditure -694,000,000
Unlevered Free Cash Flow -3,696,695,600
Current Assets 26,458,000,000
Current Cash 4,110,000,000
Current Liabilities 20,266,000,000
Current Debt 2,287,000,000
Non-Cash Working Capital (NCWC) 4,369,000,000
Change in NCWC 3,077,000,000
EBIT 2,261,000,000
Tax Provision 772,000,000
Depreciation and Amortization 961,000,000
Capital Expenditure -762,000,000
Unlevered Free Cash Flow 4,599,571,428
Current Assets 21,865,000,000
Current Cash 4,157,000,000
Current Liabilities 18,447,000,000
Current Debt 2,031,000,000
Non-Cash Working Capital (NCWC) 1,292,000,000
Change in NCWC 516,000,000
EBIT 2,102,000,000
Tax Provision 544,000,000
Depreciation and Amortization 916,000,000
Capital Expenditure -772,000,000
Unlevered Free Cash Flow 2,222,364,322
Current Assets 21,939,000,000
Current Cash 5,628,000,000
Current Liabilities 16,273,000,000
Current Debt 738,000,000
Non-Cash Working Capital (NCWC) 776,000,000
Change in NCWC -1,163,000,000
EBIT 3,294,000,000
Tax Provision 860,000,000
Depreciation and Amortization 1,101,000,000
Capital Expenditure -949,000,000
Unlevered Free Cash Flow 1,406,231,197
Current Assets 21,940,000,000
Current Cash 5,597,000,000
Current Liabilities 15,407,000,000
Current Debt 1,003,000,000
Non-Cash Working Capital (NCWC) 1,939,000,000
Change in NCWC -233,000,000
EBIT 3,098,000,000
Tax Provision 781,000,000
Depreciation and Amortization 1,135,000,000
Capital Expenditure -831,000,000
Unlevered Free Cash Flow 2,304,570,560
Current Assets 22,760,000,000
Current Cash 6,198,000,000
Current Liabilities 15,844,000,000
Current Debt 1,454,000,000
Non-Cash Working Capital (NCWC) 2,172,000,000
Change in NCWC -819,000,000
EBIT 3,154,000,000
Tax Provision 788,000,000
Depreciation and Amortization 1,160,000,000
Capital Expenditure -876,000,000
Unlevered Free Cash Flow 1,743,876,056
Current Assets 24,986,000,000
Current Cash 6,768,000,000
Current Liabilities 15,580,000,000
Current Debt 353,000,000
Non-Cash Working Capital (NCWC) 2,991,000,000
Change in NCWC -727,000,000
EBIT 3,649,000,000
Tax Provision 1,202,000,000
Depreciation and Amortization 1,305,000,000
Capital Expenditure -1,026,000,000
Unlevered Free Cash Flow 2,075,204,825
Current Assets 26,425,000,000
Current Cash 6,485,000,000
Current Liabilities 16,675,000,000
Current Debt 453,000,000
Non-Cash Working Capital (NCWC) 3,718,000,000
Change in NCWC 634,000,000
EBIT 4,428,000,000
Tax Provision 1,122,000,000
Depreciation and Amortization 1,318,000,000
Capital Expenditure -1,106,000,000
Unlevered Free Cash Flow 4,052,107,230
Current Assets 28,002,000,000
Current Cash 8,481,000,000
Current Liabilities 18,974,000,000
Current Debt 2,537,000,000
Non-Cash Working Capital (NCWC) 3,084,000,000
Change in NCWC 860,000,000
EBIT 4,158,000,000
Tax Provision 1,030,000,000
Depreciation and Amortization 1,182,000,000
Capital Expenditure -1,293,000,000
Unlevered Free Cash Flow 3,791,121,938
Current Assets 23,787,000,000
Current Cash 5,767,000,000
Current Liabilities 16,561,000,000
Current Debt 765,000,000
Non-Cash Working Capital (NCWC) 2,224,000,000
Change in NCWC 1,181,000,000
EBIT 4,690,000,000
Tax Provision 1,244,000,000
Depreciation and Amortization 995,000,000
Capital Expenditure -1,021,000,000
Unlevered Free Cash Flow 4,562,723,076

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