DCF Tool

ETRN

Equitrans Midstream Corporation – Pipeline Transportation of Natural Gas
Equitrans Midstream Corporation (ETRN) has a premier asset footprint in the Appalachian Basin and, as the parent company of EQM Midstream Partners, is one of the largest natural gas gatherers in the United States. Through its strategically located assets in the Marcellus and Utica regions, ETRN has an operational focus on gas transmission and storage systems, gas gathering systems, and water services that support natural gas development and production across the Basin. With a rich 135-year history in the energy industry, ETRN was launched as a standalone company in 2018 with the vision to be the premier midstream services provider in North America. ETRN is helping to meet America's growing need for clean-burning energy, while also providing a rewarding workplace and enriching the communities where its employees live and work.
Analysis Results
Intrinsic Value $36.98
Latest Price $9.46
Relative Value 74% undervalued
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Cash Flow (Millions)
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 4.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 4.4%, 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 (million) Present value (million)
2022 765 715
2023 799 698
2024 834 682
2025 870 666
2026 908 650
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 18800 million. This corresponds to a present value of 12600 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3410 million. Adding in the terminal value gives a total present value of 16000 million.

There are presently 433.0 million outstanding shares, so the intrinsic value per share is 36.98.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 446,829,000
Current Cash 134,661,000
Current Liabilities 367,576,000
Current Debt 0
Non-Cash Working Capital (NCWC) -55,408,000
Change in NCWC -116,744,000
EBIT 707,320,000
Tax Provision -345,091,000
Depreciation and Amortization 335,223,000
Capital Expenditure -290,521,000
Unlevered Free Cash Flow 635,278,000
Current Assets 561,737,000
Current Cash 208,023,000
Current Liabilities 594,878,000
Current Debt 302,500,000
Non-Cash Working Capital (NCWC) 61,336,000
Change in NCWC 104,403,000
EBIT 1,137,772,000
Tax Provision 105,331,000
Depreciation and Amortization 322,808,000
Capital Expenditure -462,031,000
Unlevered Free Cash Flow 941,737,723
Current Assets 375,212,000
Current Cash 88,322,000
Current Liabilities 335,957,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) -43,067,000
Change in NCWC 225,722,000
EBIT 1,234,617,000
Tax Provision 50,704,000
Depreciation and Amortization 280,622,000
Capital Expenditure -967,369,000
Unlevered Free Cash Flow 773,592,000
Current Assets 568,839,000
Current Cash 294,172,000
Current Liabilities 549,456,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) -268,789,000
Change in NCWC 103,593,000
EBIT 1,052,247,000
Tax Provision 83,142,000
Depreciation and Amortization 217,368,000
Capital Expenditure -865,882,000
Unlevered Free Cash Flow 360,147,124

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