WPP Intrinsic Value

WPP

WPP Plc. – Advertising Agencies

WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England.

Analysis Results

Intrinsic Value	$89.09
Latest Price	$53.99
Relative Value	39% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

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 -6.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -6.5%, 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)
2023	1.14	1.07
2024	1.06	0.944
2025	0.994	0.831
2026	0.929	0.732
2027	0.869	0.645

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 21.4 billion. This corresponds to a present value of 14.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 4.22 billion. Adding in the terminal value gives a total present value of 19.1 billion.

There are presently 215.0 million outstanding shares, so the intrinsic value per share is 89.09.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	18,265,921,268
Current Cash	3,014,216,358
Current Liabilities	21,423,498,910
Current Debt	1,755,903,520
Non-Cash Working Capital (NCWC)	-4,415,890,479
Change in NCWC	1,233,435,105
EBIT	1,570,078,261
Tax Provision	465,047,067
Depreciation and Amortization	620,748,309
Capital Expenditure	-270,148,309
Unlevered Free Cash Flow	2,633,732,193

Current Assets	20,697,548,242
Current Cash	5,240,519,449
Current Liabilities	22,249,364,993
Current Debt	1,143,010,616
Non-Cash Working Capital (NCWC)	-5,649,325,584
Change in NCWC	-1,445,603,385
EBIT	1,690,829,732
Tax Provision	310,552,299
Depreciation and Amortization	731,235,272
Capital Expenditure	-395,579,657
Unlevered Free Cash Flow	171,689,786

Current Assets	32,707,198,730
Current Cash	17,575,597,372
Current Liabilities	31,520,558,751
Current Debt	12,185,235,195
Non-Cash Working Capital (NCWC)	-4,203,722,198
Change in NCWC	-1,076,656,375
EBIT	-3,277,464,468
Tax Provision	176,176,999
Depreciation and Amortization	859,765,560
Capital Expenditure	-371,565,876
Unlevered Free Cash Flow	-3,865,921,159

Current Assets	20,254,247,070
Current Cash	3,894,240,354
Current Liabilities	20,488,504,843
Current Debt	1,001,432,303
Non-Cash Working Capital (NCWC)	-3,127,065,823
Change in NCWC	-228,866,333
EBIT	1,743,029,978
Tax Provision	360,699,258
Depreciation and Amortization	483,205,842
Capital Expenditure	-516,914,827
Unlevered Free Cash Flow	992,384,968

Current Assets	20,229,917,143
Current Cash	3,353,846,544
Current Liabilities	21,074,976,843
Current Debt	1,300,706,754
Non-Cash Working Capital (NCWC)	-2,898,199,489
Change in NCWC	-49,946,991
EBIT	1,890,979,685
Tax Provision	410,983,238
Depreciation and Amortization	690,005,202
Capital Expenditure	-476,075,674
Unlevered Free Cash Flow	1,636,395,749

Current Assets	20,379,971,758
Current Cash	3,214,247,097
Current Liabilities	20,852,821,188
Current Debt	838,844,030
Non-Cash Working Capital (NCWC)	-2,848,252,498
Change in NCWC	540,606,821
EBIT	2,717,338,528
Tax Provision	264,784,928
Depreciation and Amortization	621,102,109
Capital Expenditure	-438,440,830
Unlevered Free Cash Flow	3,186,818,314

Current Assets	18,985,037,535
Current Cash	2,995,832,284
Current Liabilities	20,610,499,986
Current Debt	1,232,435,416
Non-Cash Working Capital (NCWC)	-3,388,859,319
Change in NCWC	3,691,850
EBIT	2,597,518,993
Tax Provision	478,098,886
Depreciation and Amortization	525,921,068
Capital Expenditure	-350,491,109
Unlevered Free Cash Flow	2,242,297,963

Current Assets	19,810,839,956
Current Cash	3,528,667,936
Current Liabilities	21,055,145,670
Current Debt	1,380,422,480
Non-Cash Working Capital (NCWC)	-3,392,551,170
Change in NCWC	-378,102,194
EBIT	2,486,834,060
Tax Provision	366,582,150
Depreciation and Amortization	545,800,090
Capital Expenditure	-364,952,896
Unlevered Free Cash Flow	1,877,217,121

Current Assets	19,450,243,648
Current Cash	3,904,936,816
Current Liabilities	19,574,880,864
Current Debt	1,015,125,056
Non-Cash Working Capital (NCWC)	-3,014,448,976
Change in NCWC	-867,433,704
EBIT	2,438,662,336
Tax Provision	466,845,632
Depreciation and Amortization	584,955,712
Capital Expenditure	-333,194,752
Unlevered Free Cash Flow	1,318,427,180

Current Assets	19,373,259,752
Current Cash	3,662,885,216
Current Liabilities	19,409,532,472
Current Debt	1,552,142,664
Non-Cash Working Capital (NCWC)	-2,147,015,272
Change in NCWC	326,401,740
EBIT	2,437,526,784
Tax Provision	467,753,212
Depreciation and Amortization	683,411,020
Capital Expenditure	-469,072,220
Unlevered Free Cash Flow	2,444,599,822

Current Assets	18,453,632,428
Current Cash	3,142,126,372
Current Liabilities	19,538,912,184
Current Debt	1,753,989,116
Non-Cash Working Capital (NCWC)	-2,473,417,012
Change in NCWC	528,138,788
EBIT	2,116,772,020
Tax Provision	318,525,328
Depreciation and Amortization	640,604,184
Capital Expenditure	-533,190,724
Unlevered Free Cash Flow	2,370,029,696

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