In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.
Paying users area
Try for free
Raytheon Technologies Corp. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get 1-month access^{} to Raytheon Technologies Corp. for $19.99, or
get full access^{} to the entire website for at least 3 months from $49.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Intrinsic Stock Value (Valuation Summary)
Raytheon Technologies Corp., free cash flow to the firm (FCFF) forecast
US$ in millions, except per share data
Year | Value | FCFF_{t} or Terminal value (TV_{t}) | Calculation | Present value at |
---|---|---|---|---|
0^{1} | FCFF_{0} | |||
1 | FCFF_{1} | = × (1 + ) | ||
2 | FCFF_{2} | = × (1 + ) | ||
3 | FCFF_{3} | = × (1 + ) | ||
4 | FCFF_{4} | = × (1 + ) | ||
5 | FCFF_{5} | = × (1 + ) | ||
5 | Terminal value (TV_{5}) | = × (1 + ) ÷ ( – ) | ||
Intrinsic value of Raytheon Technologies Corp. capital | ||||
Less: Debt (fair value) | ||||
Intrinsic value of Raytheon Technologies Corp. common stock | ||||
Intrinsic value of Raytheon Technologies Corp. common stock (per share) | ||||
Current share price |
Based on: 10-K (reporting date: 2022-12-31).
^{1} See details »
Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.
Weighted Average Cost of Capital (WACC)
Value^{1} | Weight | Required rate of return^{2} | Calculation | |
---|---|---|---|---|
Equity (fair value) | ||||
Debt (fair value) | = × (1 – ) |
Based on: 10-K (reporting date: 2022-12-31).
^{1} US$ in millions
^{ } Equity (fair value) = No. shares of common stock outstanding × Current share price
= ×
=
^{ } Debt (fair value). See details »
^{2} Required rate of return on equity is estimated by using CAPM. See details »
^{ } Required rate of return on debt. See details »
^{ } Required rate of return on debt is after tax.
^{ } Estimated (average) effective income tax rate
= ( + + + + ) ÷ 5
=
WACC =
FCFF Growth Rate (g)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
^{1} See details »
2022 Calculations
^{2} Interest expense, after tax = Interest expense × (1 – EITR)
= × (1 – )
=
^{3} EBIT(1 – EITR)
= Net income (loss) attributable to common shareowners – Loss from discontinued operations + Interest expense, after tax
= – +
=
^{4} RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [ – ] ÷
=
^{5} ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × ÷
=
^{6} g = RR × ROIC
= ×
=
FCFF growth rate (g) implied by single-stage model
g = 100 × (Total capital, fair value_{0} × WACC – FCFF_{0}) ÷ (Total capital, fair value_{0} + FCFF_{0})
= 100 × ( × – ) ÷ ( + )
=
where:
Total capital, fair value_{0} = current fair value of Raytheon Technologies Corp. debt and equity (US$ in millions)
FCFF_{0} = the last year Raytheon Technologies Corp. free cash flow to the firm (US$ in millions)
WACC = weighted average cost of Raytheon Technologies Corp. capital
Year | Value | g_{t} |
---|---|---|
1 | g_{1} | |
2 | g_{2} | |
3 | g_{3} | |
4 | g_{4} | |
5 and thereafter | g_{5} |
where:
g_{1} is implied by PRAT model
g_{5} is implied by single-stage model
g_{2}, g_{3} and g_{4} are calculated using linear interpoltion between g_{1} and g_{5}
Calculations
g_{2} = g_{1} + (g_{5} – g_{1}) × (2 – 1) ÷ (5 – 1)
= + ( – ) × (2 – 1) ÷ (5 – 1)
=
g_{3} = g_{1} + (g_{5} – g_{1}) × (3 – 1) ÷ (5 – 1)
= + ( – ) × (3 – 1) ÷ (5 – 1)
=
g_{4} = g_{1} + (g_{5} – g_{1}) × (4 – 1) ÷ (5 – 1)
= + ( – ) × (4 – 1) ÷ (5 – 1)
=