DCF Tool

HSBC

HSBC Holdings plc – Savings Institutions
HSBC is a British universal bank and financial services group headquartered in London, England, with unique historical and business links to East Asia and a highly multinational footprint. It is the largest Europe-based bank by total assets, ahead of BNP Paribas, with US$2.953 trillion as of December 2021.
Analysis Results
Intrinsic Value $71.29
Latest Price $38.66
Relative Value 46% 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 -8.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 2.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -8.9%, 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 12.7 12.4
2024 11.6 11.0
2025 10.5 9.79
2026 9.59 8.71
2027 8.74 7.74
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 262 billion. This corresponds to a present value of 227 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 49.6 billion. Adding in the terminal value gives a total present value of 276 billion.

There are presently 3.88 billion outstanding shares, so the intrinsic value per share is 71.29.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,792,538,000,000
Current Cash 0
Current Liabilities 2,650,716,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 141,822,000,000
Change in NCWC -27,364,000,000
EBIT 19,906,000,000
Tax Provision 858,000,000
Depreciation and Amortization 3,873,000,000
Capital Expenditure -4,410,000,000
Unlevered Free Cash Flow -8,969,403,696
Current Assets 2,903,084,000,000
Current Cash 0
Current Liabilities 2,733,898,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 169,186,000,000
Change in NCWC 44,436,000,000
EBIT 19,493,000,000
Tax Provision 4,213,000,000
Depreciation and Amortization 4,286,000,000
Capital Expenditure -3,565,000,000
Unlevered Free Cash Flow 60,306,193,324
Current Assets 2,894,992,000,000
Current Cash 0
Current Liabilities 2,770,242,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 124,750,000,000
Change in NCWC 8,483,000,000
EBIT 8,818,000,000
Tax Provision 2,678,000,000
Depreciation and Amortization 5,241,000,000
Capital Expenditure -3,510,000,000
Unlevered Free Cash Flow 16,341,490,258
Current Assets 2,630,772,000,000
Current Cash 0
Current Liabilities 2,514,505,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 116,267,000,000
Change in NCWC -885,000,000
EBIT 20,696,000,000
Tax Provision 4,639,000,000
Depreciation and Amortization 10,519,000,000
Capital Expenditure -1,343,000,000
Unlevered Free Cash Flow 21,793,717,314
Current Assets 2,478,095,000,000
Current Cash 0
Current Liabilities 2,360,943,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 117,152,000,000
Change in NCWC 799,000,000
EBIT 19,857,000,000
Tax Provision 4,865,000,000
Depreciation and Amortization 1,933,000,000
Capital Expenditure -3,044,000,000
Unlevered Free Cash Flow 14,688,071,644
Current Assets 2,436,985,000,000
Current Cash 0
Current Liabilities 2,320,632,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 116,353,000,000
Change in NCWC 7,674,000,000
EBIT 17,167,000,000
Tax Provision 5,288,000,000
Depreciation and Amortization 1,862,000,000
Capital Expenditure -2,452,000,000
Unlevered Free Cash Flow 18,963,000,000
Current Assets 2,296,674,000,000
Current Cash 0
Current Liabilities 2,187,995,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 108,679,000,000
Change in NCWC -33,781,000,000
EBIT 10,352,000,000
Tax Provision 3,666,000,000
Depreciation and Amortization 5,212,000,000
Capital Expenditure -2,057,000,000
Unlevered Free Cash Flow -25,610,112,485
Current Assets 2,315,961,000,000
Current Cash 0
Current Liabilities 2,173,501,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 142,460,000,000
Change in NCWC -13,174,000,000
EBIT 18,867,000,000
Tax Provision 3,771,000,000
Depreciation and Amortization 2,181,000,000
Capital Expenditure -2,306,000,000
Unlevered Free Cash Flow 1,797,000,000
Current Assets 2,581,270,000,000
Current Cash 0
Current Liabilities 2,425,636,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 155,634,000,000
Change in NCWC 45,098,000,000
EBIT 18,680,000,000
Tax Provision 3,975,000,000
Depreciation and Amortization 2,251,000,000
Capital Expenditure -2,380,000,000
Unlevered Free Cash Flow 59,674,000,000
Current Assets 2,587,429,000,000
Current Cash 0
Current Liabilities 2,476,893,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 110,536,000,000
Change in NCWC 20,859,000,000
EBIT 20,958,000,000
Tax Provision 4,765,000,000
Depreciation and Amortization 2,330,000,000
Capital Expenditure -2,786,000,000
Unlevered Free Cash Flow 36,935,346,554
Current Assets 2,592,655,000,000
Current Cash 0
Current Liabilities 2,502,978,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 89,677,000,000
Change in NCWC 23,084,000,000
EBIT 13,040,000,000
Tax Provision 5,315,000,000
Depreciation and Amortization 2,531,000,000
Capital Expenditure -2,326,000,000
Unlevered Free Cash Flow 32,972,537,217

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