DCF Tool

IPG

Interpublic Group Of Cos., Inc. – Advertising Agencies
Interpublic Group of Companies Inc. is values-based, data-fueled, and creatively-driven. Major global brands include Acxiom, Craft, FCB (Foote, Cone & Belding), FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, Matterkind, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon, R/GA, UM and Weber Shandwick. Other leading brands include Avrett Free Ginsberg, Campbell Ewald, Carmichael Lynch, Deutsch, Hill Holliday, ID Media and The Martin Agency.
Analysis Results
Intrinsic Value $13.54
Latest Price $25.44
Relative Value 88% 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 -4.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -4.2%, 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 0.431 0.398
2023 0.413 0.352
2024 0.395 0.312
2025 0.379 0.276
2026 0.363 0.245
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5.96 billion. This corresponds to a present value of 3.71 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1.58 billion. Adding in the terminal value gives a total present value of 5.29 billion.

There are presently 391.0 million outstanding shares, so the intrinsic value per share is 13.54.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 11,231,800,000
Current Cash 3,270,000,000
Current Liabilities 10,890,000,000
Current Debt 48,200,000
Non-Cash Working Capital (NCWC) -2,880,000,000
Change in NCWC -708,600,000
EBIT 1,449,300,000
Tax Provision 251,800,000
Depreciation and Amortization 283,800,000
Capital Expenditure -195,300,000
Unlevered Free Cash Flow 531,197,599
Current Assets 9,367,600,000
Current Cash 2,509,000,000
Current Liabilities 9,580,500,000
Current Debt 550,500,000
Non-Cash Working Capital (NCWC) -2,171,400,000
Change in NCWC -883,900,000
EBIT 1,003,100,000
Tax Provision 8,000,000
Depreciation and Amortization 290,600,000
Capital Expenditure -167,500,000
Unlevered Free Cash Flow 220,144,284
Current Assets 8,770,700,000
Current Cash 1,192,200,000
Current Liabilities 9,420,400,000
Current Debt 554,400,000
Non-Cash Working Capital (NCWC) -1,287,500,000
Change in NCWC -746,900,000
EBIT 1,120,300,000
Tax Provision 204,800,000
Depreciation and Amortization 278,500,000
Capital Expenditure -198,500,000
Unlevered Free Cash Flow 192,289,905
Current Assets 8,182,900,000
Current Cash 673,400,000
Current Liabilities 8,123,900,000
Current Debt 73,800,000
Non-Cash Working Capital (NCWC) -540,600,000
Change in NCWC 377,500,000
EBIT 1,007,700,000
Tax Provision 199,200,000
Depreciation and Amortization 202,900,000
Capital Expenditure -177,100,000
Unlevered Free Cash Flow 1,171,145,967
Current Assets 7,464,100,000
Current Cash 790,900,000
Current Liabilities 7,678,200,000
Current Debt 86,900,000
Non-Cash Working Capital (NCWC) -918,100,000
Change in NCWC 40,900,000
EBIT 974,500,000
Tax Provision 281,900,000
Depreciation and Amortization 157,100,000
Capital Expenditure -155,900,000
Unlevered Free Cash Flow 703,324,198
Current Assets 7,438,000,000
Current Cash 1,100,600,000
Current Liabilities 7,706,000,000
Current Debt 409,600,000
Non-Cash Working Capital (NCWC) -959,000,000
Change in NCWC 289,900,000
EBIT 938,300,000
Tax Provision 198,000,000
Depreciation and Amortization 160,200,000
Capital Expenditure -200,700,000
Unlevered Free Cash Flow 963,999,337
Current Assets 7,693,100,000
Current Cash 1,509,700,000
Current Liabilities 7,584,300,000
Current Debt 152,000,000
Non-Cash Working Capital (NCWC) -1,248,900,000
Change in NCWC -37,900,000
EBIT 872,200,000
Tax Provision 282,800,000
Depreciation and Amortization 157,000,000
Capital Expenditure -161,100,000
Unlevered Free Cash Flow 507,052,928
Current Assets 7,810,200,000
Current Cash 1,667,200,000
Current Liabilities 7,463,300,000
Current Debt 109,300,000
Non-Cash Working Capital (NCWC) -1,211,000,000
Change in NCWC -20,300,000
EBIT 789,800,000
Tax Provision 216,500,000
Depreciation and Amortization 163,000,000
Capital Expenditure -148,700,000
Unlevered Free Cash Flow 546,936,584
Current Assets 8,084,000,000
Current Cash 1,642,100,000
Current Liabilities 8,165,300,000
Current Debt 532,700,000
Non-Cash Working Capital (NCWC) -1,190,700,000
Change in NCWC -25,200,000
EBIT 661,000,000
Tax Provision 181,200,000
Depreciation and Amortization 157,400,000
Capital Expenditure -173,000,000
Unlevered Free Cash Flow 365,417,613
Current Assets 8,738,300,000
Current Cash 2,590,800,000
Current Liabilities 7,701,700,000
Current Debt 388,700,000
Non-Cash Working Capital (NCWC) -1,165,500,000
Change in NCWC 337,600,000
EBIT 681,400,000
Tax Provision 213,300,000
Depreciation and Amortization 147,700,000
Capital Expenditure -169,200,000
Unlevered Free Cash Flow 783,098,731

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