DCF Tool

GWW

W.W. Grainger Inc. – Industrial Machinery and Equipment Merchant Wholesalers
W.W. Grainger, Inc., with 2020 sales of $11.8 billion, is North America's leading broad line supplier of maintenance, repair and operating (MRO) products, with operations primarily in North America, Japan and Europe.
Analysis Results
Intrinsic Value $676.70
Latest Price $584.19
Relative Value 14% undervalued
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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 9.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 9.8%, 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)
2022 1.41 1.32
2023 1.55 1.35
2024 1.7 1.39
2025 1.87 1.42
2026 2.05 1.46
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 41.4 billion. This corresponds to a present value of 27.5 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.94 billion. Adding in the terminal value gives a total present value of 34.4 billion.

There are presently 50.9 million outstanding shares, so the intrinsic value per share is 676.7.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 4,011,000,000
Current Cash 241,000,000
Current Liabilities 1,528,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,242,000,000
Change in NCWC 341,000,000
EBIT 1,547,000,000
Tax Provision 371,000,000
Depreciation and Amortization 185,000,000
Capital Expenditure -255,000,000
Unlevered Free Cash Flow 1,431,510,437
Current Assets 3,919,000,000
Current Cash 585,000,000
Current Liabilities 1,441,000,000
Current Debt 8,000,000
Non-Cash Working Capital (NCWC) 1,901,000,000
Change in NCWC 83,000,000
EBIT 1,019,000,000
Tax Provision 192,000,000
Depreciation and Amortization 182,000,000
Capital Expenditure -197,000,000
Unlevered Free Cash Flow 880,402,323
Current Assets 3,555,000,000
Current Cash 360,000,000
Current Liabilities 1,678,000,000
Current Debt 301,000,000
Non-Cash Working Capital (NCWC) 1,818,000,000
Change in NCWC 170,000,000
EBIT 1,262,000,000
Tax Provision 314,000,000
Depreciation and Amortization 229,000,000
Capital Expenditure -221,000,000
Unlevered Free Cash Flow 1,112,234,904
Current Assets 3,557,000,000
Current Cash 538,000,000
Current Liabilities 1,501,000,000
Current Debt 130,000,000
Non-Cash Working Capital (NCWC) 1,648,000,000
Change in NCWC 181,236,000
EBIT 1,139,000,000
Tax Provision 258,000,000
Depreciation and Amortization 257,000,000
Capital Expenditure -239,000,000
Unlevered Free Cash Flow 1,066,393,261
Current Assets 3,205,989,000
Current Cash 326,876,000
Current Liabilities 1,506,661,000
Current Debt 94,312,000
Non-Cash Working Capital (NCWC) 1,466,764,000
Change in NCWC -56,488,000
EBIT 1,010,891,000
Tax Provision 312,881,000
Depreciation and Amortization 264,064,000
Capital Expenditure -237,283,000
Unlevered Free Cash Flow 643,024,616
Current Assets 3,020,229,000
Current Cash 274,146,000
Current Liabilities 1,628,937,000
Current Debt 406,106,000
Non-Cash Working Capital (NCWC) 1,523,252,000
Change in NCWC -47,138,000
EBIT 1,088,304,000
Tax Provision 386,220,000
Depreciation and Amortization 248,857,000
Capital Expenditure -284,249,000
Unlevered Free Cash Flow 593,309,968
Current Assets 3,048,642,000
Current Cash 290,136,000
Current Liabilities 1,788,534,000
Current Debt 600,418,000
Non-Cash Working Capital (NCWC) 1,570,390,000
Change in NCWC 10,901,000
EBIT 1,288,580,000
Tax Provision 465,531,000
Depreciation and Amortization 227,967,000
Capital Expenditure -373,868,000
Unlevered Free Cash Flow 673,951,361
Current Assets 2,967,549,000
Current Cash 226,644,000
Current Liabilities 1,261,716,000
Current Debt 80,300,000
Non-Cash Working Capital (NCWC) 1,559,489,000
Change in NCWC 44,352,000
EBIT 1,347,117,000
Tax Provision 522,090,000
Depreciation and Amortization 208,326,000
Capital Expenditure -387,390,000
Unlevered Free Cash Flow 685,333,886
Current Assets 3,044,285,000
Current Cash 430,644,000
Current Liabilities 1,195,790,000
Current Debt 97,286,000
Non-Cash Working Capital (NCWC) 1,515,137,000
Change in NCWC 48,967,000
EBIT 1,296,854,000
Tax Provision 479,850,000
Depreciation and Amortization 180,613,000
Capital Expenditure -272,145,000
Unlevered Free Cash Flow 770,989,935
Current Assets 2,900,640,000
Current Cash 452,063,000
Current Liabilities 1,080,003,000
Current Debt 97,596,000
Non-Cash Working Capital (NCWC) 1,466,170,000
Change in NCWC 153,177,000
EBIT 1,131,125,000
Tax Provision 418,940,000
Depreciation and Amortization 159,049,000
Capital Expenditure -249,860,000
Unlevered Free Cash Flow 769,552,754

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