WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 1.85 | 0.9196 | 1.70 | 1.70 |
| 2 | 1.99 | 0.8456 | 1.68 | 3.38 |
| 3 | 2.14 | 0.7776 | 1.66 | 5.04 |
| 4 | 2.30 | 0.7151 | 1.65 | 6.69 |
| 5 | 2.48 | 0.6576 | 1.63 | 8.32 |
| 6 | 2.66 | 0.6047 | 1.61 | 9.93 |
| 7 | 2.87 | 0.5561 | 1.59 | 11.52 |
| 8 | 3.08 | 0.5114 | 1.58 | 13.10 |
| 9 | 3.32 | 0.4703 | 1.56 | 14.66 |
| 10 | 3.57 | 0.4324 | 1.54 | 16.20 |
| 11 | 3.66 | 0.3977 | 1.45 | 17.66 |
| 12 | 3.75 | 0.3657 | 1.37 | 19.03 |
| 13 | 3.84 | 0.3363 | 1.29 | 20.32 |
| 14 | 3.94 | 0.3092 | 1.22 | 21.54 |
| 15 | 4.04 | 0.2844 | 1.15 | 22.69 |
| 16 | 4.14 | 0.2615 | 1.08 | 23.77 |
| 17 | 4.24 | 0.2405 | 1.02 | 24.79 |
| 18 | 4.35 | 0.2211 | 0.96 | 25.75 |
| 19 | 4.46 | 0.2034 | 0.91 | 26.66 |
| 20 | 4.57 | 0.1870 | 0.85 | 27.51 |
REVERSE DCF
At $119.06, the market implies a stage-1 growth rate of 29.0%.
MARKET IMPLIES
29.0%
YOUR ASSUMPTION
7.6%
DELTA
+21.4pp
If $119.06 is correct and your other inputs (WACC 8.7%, 10+10y, terminal 2.5%) hold, the market needs WMT to grow cash flow at 29.0% annually for the next 10 years.