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  • DCF analysis for Happy Hour Co

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    This document summarizes an illustrative discounted cash flow analysis for Happy Hour Co that was conducted by J.P. Morgan. It shows the company's implied equity value and share price under different assumptions for weighted average cost of capital and terminal growth rate. The analysis values Happy Hour Co's equity at $706 million, implying a share price of $355 cents, which is a 114.9% premium to the current share price. It also provides sensitivities around how the implied value and share price would change under different WACC and perpetual growth rate assumptions.

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    This document summarizes an illustrative discounted cash flow analysis for Happy Hour Co that was conducted by J.P. Morgan. It shows the company's implied equity value and share price under different assumptions for weighted average cost of capital and terminal growth rate. The analysis values Happy Hour Co's equity at $706 million, implying a share price of $355 cents, which is a 114.9% premium to the current share price. It also provides sensitivities around how the implied value and share price would change under different WACC and perpetual growth rate assumptions.

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    Download as PPTX, PDF, TXT or read online from Scribd
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    229 views1 page

    DCF analysis for Happy Hour Co

    Uploaded by

    vikas
    This document summarizes an illustrative discounted cash flow analysis for Happy Hour Co that was conducted by J.P. Morgan. It shows the company's implied equity value and share price under different assumptions for weighted average cost of capital and terminal growth rate. The analysis values Happy Hour Co's equity at $706 million, implying a share price of $355 cents, which is a 114.9% premium to the current share price. It also provides sensitivities around how the implied value and share price would change under different WACC and perpetual growth rate assumptions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Illustrative DCF analysis for Happy Hour Co

    Summary financials and cash flow


    Management estimates J.P. Morgan outside-in extrapolation

    Net present value based on perpetuity growth method


    Amount % of Sensitising firm value ($m) and implied offer price to WACC and TGR
    Value Based on 8.5% WACC &
    0.5% TGR     Perpetuity Growth Rate (%)
    ($m) NPV
      0.00% 0.25% 0.50% 0.75% 1.00%
    WACC (%)

    Present Value of 7.5% 874 / 396c 890 / 405c 908 / 414c 927 / 424c 948 / 434c
    403 51.0%
    Cashflows 8.0% 816 / 368c 830 / 375c 845 / 382c 861 / 390c 878 / 399c
    PV of Terminal Value 387 49.0%
    8.5% 766 / 342c 777 / 348c 790 / 355c 804 / 361c 818 / 369c
    Implied Firm NPV   790 100.0%
    9.0% 721 / 320c 731 / 325c 742 / 330c 753 / 336c 765 / 342c
    Net debt & adjustments (85)
    9.5% 680 / 299c 689 / 304c 698 / 308c 708 / 313c 719 / 319c
    Implied equity value   706   Morgan analysis
    Source: Company Business Plan (January 2020); Equity research; J.P.
    Implied share price ($c) 355 1
    WORLDWIDE BREWING
    % premium to current 114.9%

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