DCF Tool

TKR

Timken Co. – Ball and Roller Bearing Manufacturing
The Timken Company designs a growing portfolio of engineered bearings and power transmission products. With more than a century of knowledge and innovation, Timken continuously improves the reliability and efficiency of global machinery and equipment to move the world forward. Timken posted $3.8 billion in sales in 2019 and employs more than 17,000 people globally, operating from 42 countries.
Analysis Results
Intrinsic Value $219.25
Latest Price $59.04
Relative Value 73% 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 13.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 13.8%, 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 0.672 0.624
2023 0.765 0.658
2024 0.87 0.695
2025 0.99 0.733
2026 1.13 0.773
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 19.8 billion. This corresponds to a present value of 12.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.48 billion. Adding in the terminal value gives a total present value of 16.1 billion.

There are presently 73.4 million outstanding shares, so the intrinsic value per share is 219.25.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,213,500,000
Current Cash 257,100,000
Current Liabilities 896,600,000
Current Debt 53,800,000
Non-Cash Working Capital (NCWC) 1,113,600,000
Change in NCWC 150,900,000
EBIT 522,000,000
Tax Provision 95,100,000
Depreciation and Amortization 167,800,000
Capital Expenditure -148,300,000
Unlevered Free Cash Flow 588,240,956
Current Assets 2,000,300,000
Current Cash 320,300,000
Current Liabilities 848,000,000
Current Debt 130,700,000
Non-Cash Working Capital (NCWC) 962,700,000
Change in NCWC -47,800,000
EBIT 476,100,000
Tax Provision 103,900,000
Depreciation and Amortization 167,100,000
Capital Expenditure -121,600,000
Unlevered Free Cash Flow 348,978,425
Current Assets 1,874,600,000
Current Cash 209,500,000
Current Liabilities 736,600,000
Current Debt 82,000,000
Non-Cash Working Capital (NCWC) 1,010,500,000
Change in NCWC 70,200,000
EBIT 523,200,000
Tax Provision 97,700,000
Depreciation and Amortization 160,600,000
Capital Expenditure -140,600,000
Unlevered Free Cash Flow 505,193,734
Current Assets 1,737,200,000
Current Cash 154,300,000
Current Liabilities 685,600,000
Current Debt 43,000,000
Non-Cash Working Capital (NCWC) 940,300,000
Change in NCWC 141,800,000
EBIT 459,400,000
Tax Provision 102,600,000
Depreciation and Amortization 146,000,000
Capital Expenditure -112,600,000
Unlevered Free Cash Flow 519,102,719
Current Assets 1,500,100,000
Current Cash 138,000,000
Current Liabilities 671,700,000
Current Debt 108,100,000
Non-Cash Working Capital (NCWC) 798,500,000
Change in NCWC 183,500,000
EBIT 289,000,000
Tax Provision 57,600,000
Depreciation and Amortization 137,700,000
Capital Expenditure -104,700,000
Unlevered Free Cash Flow 441,450,750
Current Assets 1,204,000,000
Current Cash 160,500,000
Current Liabilities 452,700,000
Current Debt 24,200,000
Non-Cash Working Capital (NCWC) 615,000,000
Change in NCWC -23,900,000
EBIT 244,800,000
Tax Provision 69,200,000
Depreciation and Amortization 131,700,000
Capital Expenditure -137,500,000
Unlevered Free Cash Flow 138,827,330
Current Assets 1,206,400,000
Current Cash 139,300,000
Current Liabilities 505,300,000
Current Debt 77,100,000
Non-Cash Working Capital (NCWC) 638,900,000
Change in NCWC -30,000,000
EBIT 299,600,000
Tax Provision -121,600,000
Depreciation and Amortization 130,800,000
Capital Expenditure -105,600,000
Unlevered Free Cash Flow 294,800,000
Current Assets 1,481,900,000
Current Cash 287,200,000
Current Liabilities 533,800,000
Current Debt 8,000,000
Non-Cash Working Capital (NCWC) 668,900,000
Change in NCWC -159,300,000
EBIT 355,500,000
Tax Provision 54,700,000
Depreciation and Amortization 137,000,000
Capital Expenditure -126,800,000
Unlevered Free Cash Flow 111,077,205
Current Assets 1,937,500,000
Current Cash 398,500,000
Current Liabilities 980,100,000
Current Debt 269,300,000
Non-Cash Working Capital (NCWC) 828,200,000
Change in NCWC -84,200,000
EBIT 465,400,000
Tax Provision 154,100,000
Depreciation and Amortization 194,600,000
Capital Expenditure -325,800,000
Unlevered Free Cash Flow 78,055,286
Current Assets 2,174,100,000
Current Cash 617,700,000
Current Liabilities 667,900,000
Current Debt 23,900,000
Non-Cash Working Capital (NCWC) 912,400,000
Change in NCWC -60,200,000
EBIT 722,400,000
Tax Provision 270,100,000
Depreciation and Amortization 198,000,000
Capital Expenditure -297,200,000
Unlevered Free Cash Flow 308,273,838

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