WACC
PREDICTABILITY
GROWTH WINDOWS
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
| Year | CF | Discount factor | PV | Cumulative PV |
|---|---|---|---|---|
| 1 | 1.85 | 0.9213 | 1.70 | 1.70 |
| 2 | 1.99 | 0.8489 | 1.69 | 3.39 |
| 3 | 2.14 | 0.7821 | 1.67 | 5.06 |
| 4 | 2.30 | 0.7206 | 1.66 | 6.72 |
| 5 | 2.48 | 0.6639 | 1.64 | 8.37 |
| 6 | 2.66 | 0.6117 | 1.63 | 10.00 |
| 7 | 2.87 | 0.5636 | 1.62 | 11.61 |
| 8 | 3.08 | 0.5192 | 1.60 | 13.21 |
| 9 | 3.32 | 0.4784 | 1.59 | 14.80 |
| 10 | 3.57 | 0.4408 | 1.57 | 16.37 |
| 11 | 3.66 | 0.4061 | 1.49 | 17.86 |
| 12 | 3.75 | 0.3742 | 1.40 | 19.26 |
| 13 | 3.84 | 0.3447 | 1.32 | 20.59 |
| 14 | 3.94 | 0.3176 | 1.25 | 21.84 |
| 15 | 4.04 | 0.2926 | 1.18 | 23.02 |
| 16 | 4.14 | 0.2696 | 1.12 | 24.13 |
| 17 | 4.24 | 0.2484 | 1.05 | 25.19 |
| 18 | 4.35 | 0.2289 | 1.00 | 26.18 |
| 19 | 4.46 | 0.2109 | 0.94 | 27.12 |
| 20 | 4.57 | 0.1943 | 0.89 | 28.01 |
REVERSE DCF
At $113.10, the market implies a stage-1 growth rate of 27.9%.
MARKET IMPLIES
27.9%
YOUR ASSUMPTION
7.6%
DELTA
+20.3pp
If $113.10 is correct and your other inputs (WACC 8.5%, 10+10y, terminal 2.5%) hold, the market needs WMT to grow cash flow at 27.9% annually for the next 10 years.