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MTOR

Meritor Inc – Heavy Duty Truck Manufacturing
Meritor, Inc. is a leading global supplier of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets. With more than a 110-year legacy of providing innovative products that offer superior performance, efficiency and reliability, the company serves commercial truck, trailer, off-highway, defense, specialty and aftermarket customers around the world. Meritor is based in Troy, Michigan, United States, and is made up of more than 8,600 diverse employees who apply their knowledge and skills in manufacturing facilities, engineering centers, joint ventures, distribution centers and global offices in 19 countries.
Analysis Results
Intrinsic Value $574.32
Latest Price $36.50
Relative Value 94% 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 21.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 21.6%, 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 0.873 0.824
2023 1.06 0.946
2024 1.29 1.09
2025 1.57 1.25
2026 1.91 1.43
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 49.7 billion. This corresponds to a present value of 35.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 5.54 billion. Adding in the terminal value gives a total present value of 40.7 billion.

There are presently 70.9 million outstanding shares, so the intrinsic value per share is 574.32.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,572,000,000
Current Cash 202,000,000
Current Liabilities 1,800,000,000
Current Debt 38,000,000
Non-Cash Working Capital (NCWC) 608,000,000
Change in NCWC 327,000,000
EBIT 504,000,000
Tax Provision 48,000,000
Depreciation and Amortization 206,000,000
Capital Expenditure -180,000,000
Unlevered Free Cash Flow 805,307,692
Current Assets 1,283,000,000
Current Cash 315,000,000
Current Liabilities 726,000,000
Current Debt 39,000,000
Non-Cash Working Capital (NCWC) 281,000,000
Change in NCWC 68,000,000
EBIT 346,000,000
Tax Provision 78,000,000
Depreciation and Amortization 101,000,000
Capital Expenditure -85,000,000
Unlevered Free Cash Flow 347,214,723
Current Assets 1,216,000,000
Current Cash 108,000,000
Current Liabilities 936,000,000
Current Debt 41,000,000
Non-Cash Working Capital (NCWC) 213,000,000
Change in NCWC 92,000,000
EBIT 402,000,000
Tax Provision 82,000,000
Depreciation and Amortization 87,000,000
Capital Expenditure -103,000,000
Unlevered Free Cash Flow 390,562,334
Current Assets 1,226,000,000
Current Cash 115,000,000
Current Liabilities 1,084,000,000
Current Debt 94,000,000
Non-Cash Working Capital (NCWC) 121,000,000
Change in NCWC -195,000,000
EBIT 350,000,000
Tax Provision 149,000,000
Depreciation and Amortization 84,000,000
Capital Expenditure -104,000,000
Unlevered Free Cash Flow -52,589,928
Current Assets 1,298,000,000
Current Cash 88,000,000
Current Liabilities 1,182,000,000
Current Debt 288,000,000
Non-Cash Working Capital (NCWC) 316,000,000
Change in NCWC 314,000,000
EBIT 261,000,000
Tax Provision 52,000,000
Depreciation and Amortization 75,000,000
Capital Expenditure -95,000,000
Unlevered Free Cash Flow 519,377,952
Current Assets 905,000,000
Current Cash 160,000,000
Current Liabilities 757,000,000
Current Debt 14,000,000
Non-Cash Working Capital (NCWC) 2,000,000
Change in NCWC 6,000,000
EBIT 256,000,000
Tax Provision -423,000,000
Depreciation and Amortization 67,000,000
Capital Expenditure -93,000,000
Unlevered Free Cash Flow 236,000,000
Current Assets 1,042,000,000
Current Cash 193,000,000
Current Liabilities 868,000,000
Current Debt 15,000,000
Non-Cash Working Capital (NCWC) -4,000,000
Change in NCWC -18,000,000
EBIT 257,000,000
Tax Provision 1,000,000
Depreciation and Amortization 65,000,000
Capital Expenditure -79,000,000
Unlevered Free Cash Flow 221,164,179
Current Assets 1,292,000,000
Current Cash 247,000,000
Current Liabilities 1,038,000,000
Current Debt 7,000,000
Non-Cash Working Capital (NCWC) 14,000,000
Change in NCWC -19,000,000
EBIT 455,000,000
Tax Provision 31,000,000
Depreciation and Amortization 67,000,000
Capital Expenditure -77,000,000
Unlevered Free Cash Flow 381,222,222
Current Assets 1,384,000,000
Current Cash 318,000,000
Current Liabilities 1,046,000,000
Current Debt 13,000,000
Non-Cash Working Capital (NCWC) 33,000,000
Change in NCWC 2,000,000
EBIT 178,000,000
Tax Provision 63,000,000
Depreciation and Amortization 67,000,000
Capital Expenditure -54,000,000
Unlevered Free Cash Flow 130,000,000
Current Assets 1,298,000,000
Current Cash 257,000,000
Current Liabilities 1,028,000,000
Current Debt 18,000,000
Non-Cash Working Capital (NCWC) 31,000,000
Change in NCWC -42,000,000
EBIT 248,000,000
Tax Provision 56,000,000
Depreciation and Amortization 63,000,000
Capital Expenditure -89,000,000
Unlevered Free Cash Flow 78,627,737

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