DCF Tool

LECO

Lincoln Electric Holdings, Inc. – Welding and Soldering Equipment Manufacturing
Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment and has a leading global position in brazing and soldering alloys. Headquartered in Cleveland, Ohio, Lincoln has 55 manufacturing locations in 18 countries and a worldwide network of distributors and sales offices covering more than 160 countries.
Analysis Results
Intrinsic Value $182.80
Latest Price $147.99
Relative Value 19% 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 8.9%.

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 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 (million) Present value (million)
2022 447 418
2023 487 425
2024 530 432
2025 577 439
2026 628 447
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 12700 million. This corresponds to a present value of 8430 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2160 million. Adding in the terminal value gives a total present value of 10600 million.

There are presently 57.9 million outstanding shares, so the intrinsic value per share is 182.8.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,289,593,000
Current Cash 192,958,000
Current Liabilities 755,905,000
Current Debt 52,730,000
Non-Cash Working Capital (NCWC) 393,460,000
Change in NCWC 85,111,000
EBIT 471,496,000
Tax Provision 48,418,000
Depreciation and Amortization 81,146,000
Capital Expenditure -62,531,000
Unlevered Free Cash Flow 504,978,819
Current Assets 1,112,343,000
Current Cash 257,279,000
Current Liabilities 549,449,000
Current Debt 2,734,000
Non-Cash Working Capital (NCWC) 308,349,000
Change in NCWC -39,503,000
EBIT 327,539,000
Tax Provision 57,896,000
Depreciation and Amortization 80,492,000
Capital Expenditure -59,201,000
Unlevered Free Cash Flow 237,507,586
Current Assets 1,075,581,000
Current Cash 199,563,000
Current Liabilities 563,135,000
Current Debt 34,969,000
Non-Cash Working Capital (NCWC) 347,852,000
Change in NCWC 6,973,000
EBIT 386,098,000
Tax Provision 75,410,000
Depreciation and Amortization 81,487,000
Capital Expenditure -69,615,000
Unlevered Free Cash Flow 325,930,236
Current Assets 1,237,799,000
Current Cash 358,849,000
Current Liabilities 538,182,000
Current Debt 111,000
Non-Cash Working Capital (NCWC) 340,879,000
Change in NCWC -292,000
EBIT 400,824,000
Tax Provision 81,667,000
Depreciation and Amortization 72,346,000
Capital Expenditure -71,246,000
Unlevered Free Cash Flow 312,839,905
Current Assets 1,373,608,000
Current Cash 505,826,000
Current Liabilities 528,742,000
Current Debt 2,131,000
Non-Cash Working Capital (NCWC) 341,171,000
Change in NCWC 101,775,000
EBIT 345,543,000
Tax Provision 118,761,000
Depreciation and Amortization 68,115,000
Capital Expenditure -61,656,000
Unlevered Free Cash Flow 341,726,212
Current Assets 1,043,713,000
Current Cash 418,099,000
Current Liabilities 388,107,000
Current Debt 1,889,000
Non-Cash Working Capital (NCWC) 239,396,000
Change in NCWC -26,572,000
EBIT 325,550,000
Tax Provision 79,015,000
Depreciation and Amortization 65,073,000
Capital Expenditure -49,877,000
Unlevered Free Cash Flow 221,439,875
Current Assets 935,995,000
Current Cash 304,183,000
Current Liabilities 370,122,000
Current Debt 4,278,000
Non-Cash Working Capital (NCWC) 265,968,000
Change in NCWC -130,077,000
EBIT 347,411,000
Tax Provision 42,375,000
Depreciation and Amortization 64,007,000
Capital Expenditure -50,507,000
Unlevered Free Cash Flow 144,128,061
Current Assets 1,098,677,000
Current Cash 278,379,000
Current Liabilities 492,419,000
Current Debt 68,166,000
Non-Cash Working Capital (NCWC) 396,045,000
Change in NCWC 6,716,000
EBIT 409,212,000
Tax Provision 121,933,000
Depreciation and Amortization 69,607,000
Capital Expenditure -72,990,000
Unlevered Free Cash Flow 279,775,652
Current Assets 1,130,775,000
Current Cash 299,825,000
Current Liabilities 456,917,000
Current Debt 15,296,000
Non-Cash Working Capital (NCWC) 389,329,000
Change in NCWC -35,432,000
EBIT 420,254,000
Tax Provision 124,754,000
Depreciation and Amortization 68,883,000
Capital Expenditure -76,015,000
Unlevered Free Cash Flow 251,793,732
Current Assets 1,132,816,000
Current Cash 286,464,000
Current Liabilities 440,267,000
Current Debt 18,676,000
Non-Cash Working Capital (NCWC) 424,761,000
Change in NCWC -63,784,000
EBIT 376,442,000
Tax Provision 112,354,000
Depreciation and Amortization 65,334,000
Capital Expenditure -52,715,000
Unlevered Free Cash Flow 210,833,824

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