WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 7.81 | 0.9356 | 7.31 | 7.31 |
| 2 | 8.12 | 0.8753 | 7.11 | 14.41 |
| 3 | 8.44 | 0.8190 | 6.91 | 21.33 |
| 4 | 8.78 | 0.7662 | 6.73 | 28.05 |
| 5 | 9.13 | 0.7169 | 6.54 | 34.60 |
| 6 | 9.49 | 0.6707 | 6.36 | 40.96 |
| 7 | 9.86 | 0.6275 | 6.19 | 47.15 |
| 8 | 10.26 | 0.5871 | 6.02 | 53.17 |
| 9 | 10.66 | 0.5493 | 5.86 | 59.03 |
| 10 | 11.09 | 0.5139 | 5.70 | 64.72 |
| 11 | 11.36 | 0.4808 | 5.46 | 70.19 |
| 12 | 11.65 | 0.4498 | 5.24 | 75.43 |
| 13 | 11.94 | 0.4209 | 5.02 | 80.45 |
| 14 | 12.24 | 0.3938 | 4.82 | 85.27 |
| 15 | 12.54 | 0.3684 | 4.62 | 89.89 |
| 16 | 12.86 | 0.3447 | 4.43 | 94.32 |
| 17 | 13.18 | 0.3225 | 4.25 | 98.57 |
| 18 | 13.51 | 0.3017 | 4.07 | 102.64 |
| 19 | 13.84 | 0.2823 | 3.91 | 106.55 |
| 20 | 14.19 | 0.2641 | 3.75 | 110.30 |
REVERSE DCF
At $268.23, the market implies a stage-1 growth rate of 16.6%.
MARKET IMPLIES
16.6%
YOUR ASSUMPTION
4.0%
DELTA
+12.6pp
If $268.23 is correct and your other inputs (WACC 6.9%, 10+10y, terminal 2.5%) hold, the market needs JNJ to grow cash flow at 16.6% annually for the next 10 years.