Caterpillar Inc. (CAT)
Discount cash flow analysis
Price history
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $24.01 | $22.70 | $21.44 | |
Terminal Growth% | 0 | $24.51 | $23.19 | $21.92 |
+1% | $25.02 | $23.68 | $22.39 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $73.76 (overvalued by 11.66%) - 9 months ago
- SethWellbourne created a new valuation of $0.00 (overvalued by 100.0%) - 7 years ago
- SethWellbourne created a new valuation of $11.85 (overvalued by 78.23%) - over 7 years ago
- derreck0218 created a new valuation of $29.89 (overvalued by 44.28%) - over 7 years ago
- derreck0218 created a new valuation of $0.00 (overvalued by 100.0%) - over 7 years ago
- SethWellbourne created a new valuation of $15.30 (overvalued by 49.8%) - 8 years ago
- SethWellbourne created a new valuation of $5.63 (overvalued by 79.55%) - 8 years ago
- afi created a new valuation of $23.22 (overvalued by 13.29%) - over 8 years ago
- GordonGekko created a new valuation of $23.19 (overvalued by 11.86%) - over 8 years ago
- TheCrunchBlog created a new valuation of $42.88 (undervalued by 12.25%) - over 8 years ago
- GordonGekko created a new valuation of $67.52 (overvalued by 0.91%) - almost 9 years ago
- GordonGekko created a new valuation of $65.85 (overvalued by 5.28%) - almost 9 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 83,026 |
Net Debt (Long-term borrowings less cash): | 32,799 |
Equity Value: | 15,826 |
Number of Shares Outstanding: | 601,000,000 |
Calculated value per share: | $23.19 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.