DCF Tool

WES

Western Midstream Partners LP – Pipeline Transportation of Natural Gas
Western Midstream Partners, LP ('WES') is a Delawaremaster limited partnership formed to acquire, own, develop, and operate midstream assets. With midstream assets located in the Rocky Mountains, North-central Pennsylvania, Texas, and New Mexico, WES is engaged in the business of gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural-gas liquids, and crude oil; and gathering and disposing of produced water for its customers. In its capacity as a natural-gas processor, WES also buys and sells natural gas, natural-gas liquids, and condensate on behalf of itself and as an agent for its customers under certain contracts.
Analysis Results
Intrinsic Value $614.81
Latest Price $27.52
Relative Value 96% 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 53.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 53.7%, 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 2.36 2.22
2023 3.63 3.2
2024 5.57 4.63
2025 8.56 6.69
2026 13.2 9.66
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 306 billion. This corresponds to a present value of 211 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 26.4 billion. Adding in the terminal value gives a total present value of 238 billion.

There are presently 386.0 million outstanding shares, so the intrinsic value per share is 614.81.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 684,764,000
Current Cash 201,999,000
Current Liabilities 1,140,197,000
Current Debt 505,932,000
Non-Cash Working Capital (NCWC) -151,500,000
Change in NCWC -127,577,000
EBIT 1,366,770,000
Tax Provision -9,807,000
Depreciation and Amortization 551,629,000
Capital Expenditure -313,674,000
Unlevered Free Cash Flow 1,477,148,000
Current Assets 943,064,000
Current Cash 444,922,000
Current Liabilities 960,935,000
Current Debt 438,870,000
Non-Cash Working Capital (NCWC) -23,923,000
Change in NCWC 151,708,000
EBIT 1,515,185,000
Tax Provision 5,998,000
Depreciation and Amortization 491,086,000
Capital Expenditure -423,091,000
Unlevered Free Cash Flow 1,717,506,189
Current Assets 402,412,000
Current Cash 99,962,000
Current Liabilities 485,954,000
Current Debt 7,873,000
Non-Cash Working Capital (NCWC) -175,631,000
Change in NCWC 89,544,000
EBIT 1,239,028,000
Tax Provision 13,472,000
Depreciation and Amortization 483,255,000
Capital Expenditure -1,188,829,000
Unlevered Free Cash Flow 602,670,729
Current Assets 335,824,000
Current Cash 92,142,000
Current Liabilities 536,857,000
Current Debt 28,000,000
Non-Cash Working Capital (NCWC) -265,175,000
Change in NCWC -16,371,000
EBIT 852,390,000
Tax Provision 2,946,000
Depreciation and Amortization 337,536,000
Capital Expenditure -1,193,896,000
Unlevered Free Cash Flow -25,903,291
Current Assets 255,210,000
Current Cash 79,588,000
Current Liabilities 424,426,000
Current Debt 0
Non-Cash Working Capital (NCWC) -248,804,000
Change in NCWC -169,936,000
EBIT 720,503,000
Tax Provision 4,866,000
Depreciation and Amortization 290,874,000
Capital Expenditure -675,025,000
Unlevered Free Cash Flow 160,351,025

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