DCF Tool

WPP

WPP Plc. – Advertising Agencies
Analysis Results
Intrinsic Value $55.74
Latest Price $50.74
Relative Value 9% 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 -10.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -10.3%, 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 0.859 0.809
2023 0.771 0.682
2024 0.691 0.576
2025 0.619 0.486
2026 0.555 0.41
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 13.3 billion. This corresponds to a present value of 9.21 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2.96 billion. Adding in the terminal value gives a total present value of 12.2 billion.

There are presently 218.0 million outstanding shares, so the intrinsic value per share is 55.74.

Financial Statements

The following data was to determine the past cash flows.

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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