WES Intrinsic Value
Intrinsic Value of WES Overview
WES Historical Intrinsic Value
WES Valuation Metrics
WES DCF Model
| Dec'20 Actual | Dec'21 Actual | Dec'22 Actual | Dec'23 Actual | Dec'24 Actual | Dec'25 Estimate | Dec'26 Estimate | Dec'27 Estimate | Dec'28 Estimate | Dec'29 Estimate | Dec'30 Estimate | Dec'31 Estimate | Dec'32 Estimate | Dec'33 Estimate | Dec'34 Estimate | Dec'35 Terminal | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
% growth | 2,772.6 1.0% | 2,877.2 3.8% | 3,251.7 13.0% | 3,106.5 (4.5%) | 3,605.2 16.1% | 3,763.9 4.4% | 3,914.1 4.0% | 4,035.7 3.1% | 3,657.8 (9.4%) | 3,372.0 (7.8%) | 3,161.0 (6.3%) | 3,012.1 (4.7%) | 2,917.1 (3.2%) | 2,870.3 (1.6%) | 2,868.8 (0.1%) | 2,911.8 1.5% |
% margin | 1,527.9 55.1% | 1,336.3 46.4% | 1,587.9 48.8% | 1,379.6 44.4% | 1,970.7 54.7% | 1,635.8 43.5% | 1,701.1 43.5% | 1,753.9 43.5% | 1,589.7 43.5% | 1,465.5 43.5% | 1,373.8 43.5% | 1,309.1 43.5% | 1,267.8 43.5% | 1,247.4 43.5% | 1,246.8 43.5% | 1,265.5 43.5% |
NOPAT % effective tax rate | 1,510.4 54.5% | 1,350.3 46.9% | 1,582.6 48.7% | 1,373.8 44.2% | 1,948.8 54.1% | 1,617.6 43.0% | 1,682.2 43.0% | 1,734.4 43.0% | 1,572.0 43.0% | 1,449.2 43.0% | 1,358.5 43.0% | 1,294.5 43.0% | 1,253.7 43.0% | 1,233.6 43.0% | 1,232.9 43.0% | 1,251.4 43.0% |
% of revenue | 491.1 17.7% | 551.6 19.2% | 582.4 17.9% | 600.7 19.3% | 650.4 18.0% | 693.6 18.4% | 721.3 18.4% | 743.7 18.4% | 674.1 18.4% | 621.4 18.4% | 582.5 18.4% | 555.1 18.4% | 537.6 18.4% | 529.0 18.4% | 528.7 18.4% | 536.6 18.4% |
% of revenue | (423.1) (15.3%) | (313.7) (10.9%) | (487.2) (15.0%) | (735.2) (23.7%) | 0.0 0.0% | (484.9) (12.9%) | (504.3) (12.9%) | (519.9) (12.9%) | (471.2) (12.9%) | (434.4) (12.9%) | (407.2) (12.9%) | (388.1) (12.9%) | (375.8) (12.9%) | (369.8) (12.9%) | (369.6) (12.9%) | (375.1) (12.9%) |
% of revenue | 30.1 1.1% | 215.8 7.5% | (49.2) (1.5%) | (78.8) (2.5%) | 0.0 0.0% | (50.8) (1.4%) | (52.8) (1.4%) | (54.5) (1.4%) | (49.4) (1.4%) | (45.5) (1.4%) | (42.7) (1.4%) | (40.7) (1.4%) | (39.4) (1.4%) | (38.8) (1.4%) | (38.7) (1.4%) | (39.3) (1.4%) |
Free Cash Flow to Firm (FCFF) % of revenue | 1,608.5 58.0% | 1,804.0 62.7% | 1,628.5 50.1% | 1,160.5 37.4% | 2,599.3 72.1% | 1,775.5 47.2% | 1,846.4 47.2% | 1,903.8 47.2% | 1,725.5 47.2% | 1,590.7 47.2% | 1,491.1 47.2% | 1,420.9 47.2% | 1,376.1 47.2% | 1,354.0 47.2% | 1,353.3 47.2% | 1,373.6 47.2% |
% of FCFF used in calculation | 83.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||
Discount period | 0.50 | 1.50 | 2.50 | 3.50 | 4.50 | 5.50 | 6.50 | 7.50 | 8.50 | 9.50 | ||||||
Discount factor | 0.97 | 0.90 | 0.84 | 0.78 | 0.73 | 0.68 | 0.64 | 0.59 | 0.55 | 0.52 | ||||||
Discounted FCFF (DFCFF) | 1,423.6 | 1,663.7 | 1,600.2 | 1,353.0 | 1,163.6 | 1,017.6 | 904.6 | 817.2 | 750.2 | 699.5 |
WES DCF Value
DCF Value Calculation
Equity Value Bridge
WES Earnings Power Value and Enterprise Value
WES Reverse DCF
Reverse DCF Assumptions and Outputs
Implied Free Cash Flow growth vs Historical average vs Industry growth
Competing with WES Intrinsic Value
Company name | Market Cap | Enterprise Value | Intrinsic Value | DCF Value | Relative value | Ben Graham Revised fair value | Peter Lynch fair value | Earnings Power Value (EPV),
% of EV | Market-Implied Value of Growth (MIVoG),
% of EV | Reverse DCF (implied FCF growth) | Reverse DCF (implied Revenue growth) |
$15.5B | $22.4B | $62.8 59.2% undervalued | $61.1 55.0% undervalued | $64.6 63.6% undervalued | Negative 175.9% overvalued | $5.1 87.1% overvalued | 94.1% | 5.9% | (9.0%) | (5.5%) | |
$93.9B | $100.4B | $38.6 9.5% overvalued | $38.2 10.0% overvalued | $39.0 8.5% overvalued | $0.1 99.7% overvalued | $67.3 57.8% undervalued | 95.0% | 5.0% | (4.8%) | (8.8%) | |
$73.8B | $104.2B | $128.6 281.2% undervalued | $199.9 492.0% undervalued | $57.3 69.8% undervalued | $29.3 13.3% overvalued | $37.9 12.3% undervalued | 122.1% | (22.1%) | (2.5%) | (4.1%) | |
$70.8B | $97.6B | $58.5 1.6% undervalued | $75.9 32.0% undervalued | $41.2 28.5% overvalued | $32.5 43.5% overvalued | $28.5 50.4% overvalued | 41.9% | 58.1% | 6.3% | 3.9% | |
$65.6B | $125.8B | $61.6 224.0% undervalued | $80.5 323.0% undervalued | $42.8 124.7% undervalued | $3.4 82.0% overvalued | $13.6 28.5% overvalued | 100.5% | (0.5%) | (18.0%) | (14.9%) | |
$60.9B | $92.6B | $34.1 25.8% undervalued | $44.6 64.0% undervalued | $23.7 12.7% overvalued | $16.3 40.0% overvalued | $13.6 50.0% overvalued | 75.1% | 24.9% | (0.9%) | (3.4%) | |
$58.4B | $89.7B | $219.8 127.1% undervalued | $356.6 269.0% undervalued | $83.0 14.2% overvalued | $2.7 97.2% overvalued | $43.0 55.6% overvalued | 53.4% | 46.6% | 4.8% | 4.6% | |
$55.5B | $54.0B | $69.7 28.5% undervalued | $50.4 7.0% overvalued | $89.0 64.0% undervalued | $59.1 9.0% undervalued | $46.9 13.6% overvalued | 93.9% | 6.1% | (7.5%) | (6.6%) | |
$47.0B | $87.9B | $43.2 3.6% overvalued | Negative 108.0% overvalued | $43.2 3.6% overvalued | Negative 137.1% overvalued | $7.8 82.5% overvalued | 88.1% | 11.9% | 6.1% | 13.3% | |
$44.6B | $58.7B | $77.4 60.4% overvalued | N/A | $77.4 60.4% overvalued | $169.5 13.4% overvalued | $171.3 12.5% overvalued | 48.5% | 51.5% | 20.5% | 25.5% | |
$22.5B | $31.6B | $17.1 55.5% overvalued | $5.8 85.0% overvalued | $28.5 25.9% overvalued | $26.2 31.9% overvalued | $23.8 38.1% overvalued | 81.9% | 18.1% | (0.8%) | 0.1% |
Intrinsic Valuation Tools
FAQ
What is the DCF value of Western Midstream Partners, LP (WES)?
As of today, DCF Value of Western Midstream Partners, LP is $61.1, which is undervalued by 54.7%, compared to the current market share price of $39.5
How was the DCF Value calculated?
Step 1: Calculating Intrinsic Enterprise Value DCF Value was calculated by estimating Western Midstream Partners, LP future free cash flow and then discounting it, using a chosen discount rate to determine Intrinsic Enterprise Value of $0.0B Step 2: Balance Sheet Adjustments Intrinsic Equity Value is calculated by subtracting Balance Sheet items (Cash & Equivalents, Short-term investments and Total Debt) from previously calculated Intrinsic Enterprise Value. This Intrinsic Equity Value is then divided by the total number of outstanding shares of 0 to determine DCF Value of $61.1
What is the Relative value of Western Midstream Partners, LP (WES)?
As of today, Relative Value of Western Midstream Partners, LP is $64.6, which is undervalued by 63.6%, compared to the current market share price of $39.5
How was the Relative Value calculated?
Relative Value was calculated by applying various valuation multiples (EV/Revenue, EV/EBITDA, P/E etc.) to Western Midstream Partners, LP financials to determine Relative Value of $64.6
What is Western Midstream Partners, LP (WES) discount rate?
Western Midstream Partners, LP current Cost of Equity is 11.1%, while its WACC stands at 7.2%. Cost of Equity is used to value equity, while discounting free cash flow to equity holders (such as Net Income or Free Cash Flow to Equity). Weighted Average Cost of Capital (WACC) is used to value the entire firm, while discounting cash flows available to both debt and equity holders (NOPAT or Free Cash Flow to the Firm)
How is Cost of Equity for Western Midstream Partners, LP (WES) calculated?
The Cost of Equity represents the return a company must offer investors to compensate for the risk of investing in its stock. It's calculated using the Capital Asset Pricing Model (CAPM), which combines the risk-free rate, the stock's beta, and the equity risk premium (ERP). This model considers the inherent risk of investing in the stock compared to a risk-free investment and the market's overall risk. Cost of Equity = Risk-Free Rate + Beta x Effective Risk Premium (ERP) 11.1% = 4.2% + 1.5 x 4.6%
How is WACC for Western Midstream Partners, LP (WES) calculated?
WACC, or Weighted Average Cost of Capital, is a calculation that reflects the average rate of return a company is expected to pay its security holders to finance its assets. It is a critical measure in financial analysis for valuing a company's entire operations. The WACC formula combines the costs of equity and debt, weighted by their respective proportions in the company's capital structure. WACC = Cost of Equity x Equity Weight in Total Capital + Cost of Debt x (1 - Effective Tax Rate) Debt Weight in Total Capital 7.2% = 11.1% x 30.9% + (1.4%) x (1 - 0.1%) x 69.1%