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Pitney Bowes Inc. NT 43

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Airlines, Airports & Air ServicesSector: Industrials

Fair Value Summary

Current Price$20.93
5Y Range7.20 – 14.75
5Y Selected10.97
(-) Safety Margin70.69%
5Y Buy Price$3.22
Upside (to Buy Price)-84.63%
10Y Range8.29 – 15.73
10Y Selected12.01
(-) Safety Margin70.69%
10Y Buy Price$3.52
Upside (to Buy Price)-83.18%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.7605
Revenue R2 (10Y)0.3106
Net Income R2 (5Y)0.0001
Net Income R2 (10Y)0.5401
EBITDA R2 (5Y)0.0590
EBITDA R2 (10Y)0.7167
FCF R2 (5Y)0.1603
FCF R2 (10Y)0.7331
Safety Score0.2931

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth-10.04%-8.48%-6.92%-5.36%-3.80%-2.24%-0.68%0.88%2.44%4.00%
Revenue1,823.121,668.511,553.051,469.801,413.941,382.271,372.871,384.951,418.741,475.49
EBITDA473.43433.28403.29381.68367.17358.95356.50359.64368.42383.15
D&A-93.14-85.24-79.34-75.09-72.24-70.62-70.14-70.75-72.48-75.38
EBIT380.29348.04323.95306.59294.94288.33286.37288.89295.94307.77
Pro forma Taxes-62.02-56.76-52.83-50.00-48.10-47.02-46.70-47.11-48.26-50.19
NOPAT318.27291.28271.12256.59246.84241.31239.67241.78247.68257.58
Capital Expenditures-79.13-72.42-67.41-63.80-61.37-60.00-59.59-60.12-61.58-64.05
NWC Investment-68.14-51.77-38.66-27.88-18.70-10.61-3.154.0511.3219.00
(+) D&A93.1485.2479.3475.0972.2470.6270.1470.7572.4875.38
Free Cash Flow264.14252.33244.39240.00239.00241.32247.07256.46269.89287.92
Diluted Shares Outstanding181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00181,765,500.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.16%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF261.85242.63215.40193.73176.83163.66153.58146.12140.95137.83
Raw: 3,516.61
2,490.97
Raw: 4,236.47
1,941.63

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value3,581.413,774.20
(-) Net Debt1,734.651,734.65
Equity Value1,846.752,039.55
(/) Shares Out181.77181.77
Fair Value$10.16$11.22
(-) Safety Margin70.69%70.69%
Buy Price$2.98$3.29
Current Price$20.93$20.93
Upside (to Buy Price)-85.77%-84.29%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.66%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF261.61241.64212.57189.43171.33157.13146.12137.76131.68127.59
Raw: 2,877.66
1,966.04
Raw: 3,466.73
1,464.12

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value3,042.623,240.96
(-) Net Debt1,734.651,734.65
Equity Value1,307.961,506.31
(/) Shares Out181.77181.77
Fair Value$7.20$8.29
(-) Safety Margin70.69%70.69%
Buy Price$2.11$2.43
Current Price$20.93$20.93
Upside (to Buy Price)-89.92%-88.39%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.66%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.890.830.760.710.650.600.560.52
PV UFCF262.09243.64218.30198.17182.55170.52161.50155.08150.98149.00
Raw: 4,507.73
3,311.62
Raw: 5,430.49
2,702.92

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,416.364,594.72
(-) Net Debt1,734.651,734.65
Equity Value2,681.702,860.07
(/) Shares Out181.77181.77
Fair Value$14.75$15.73
(-) Safety Margin70.69%70.69%
Buy Price$4.32$4.61
Current Price$20.93$20.93
Upside (to Buy Price)-79.34%-77.97%

Reverse DCF: Market Implied Growth

Current Price$20.93
WACC Used9.1%
IMPLIED REVENUE GROWTH130.60%
Metric2027202820292030203120322033203420352036
Implied Revenue4,453.1110,268.7523,679.4154,604.00125,915.13290,356.43669,552.991,543,968.593,560,344.088,210,043.93
Constant Implied Growth130.60%130.60%130.60%130.60%130.60%130.60%130.60%130.60%130.60%130.60%
Implied Free Cash Flow0.451.032.375.4612.5929.0466.96154.40356.03821.00
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.410.831.753.707.8316.5434.9773.91156.22330.20

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$4.03-18.73%$-7.31-281.39%
20182018-12-31$5.91-10.44%$-2.53-142.75%
20172017-12-31$11.189.89%$18.3464.07%
20162016-12-31$15.1912.99%$25.9971.11%
20152015-12-31$20.6513.78%$34.8068.50%
20142014-12-31$24.371.76%$24.460.38%
20132013-12-31$23.30-7.74%$11.75-49.55%
20122012-12-31$10.64-6.26%$11.7910.82%
20112011-12-31$18.54-12.26%$15.57-16.03%
20102010-12-31$24.18-11.63%$16.99-29.73%
20092009-12-31$22.76-13.32%$6.28-72.39%
20082008-12-31$25.48-10.19%$13.27-47.91%
20072007-12-31$38.04-4.48%$24.75-34.93%
20062006-12-31$46.19-2.78%$-55.12-219.32%
20052005-12-31$42.25-0.14%$-3.30-107.81%
20042004-12-31$46.284.22%$31.58-31.76%
20032003-12-31$40.628.53%$36.94-9.05%
20022002-12-31$32.669.93%$11.51-64.76%
20012001-12-31$37.618.99%$57.1151.84%
20002000-12-31$32.348.18%$38.9120.32%
19991999-12-31$47.178.06%$42.46-9.99%
19981998-12-31$64.507.44%$16.83-73.91%
19971997-12-31$43.919.02%$26.01-40.76%
19961996-12-31$26.735.72%$13.60-49.13%
19951995-12-31$22.944.23%$-0.03-100.13%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$11.88
Median
$11.39
10th Percentile
$8.35
90th Percentile
$15.87

Fair Value Distribution

$5.73 - $6.82
13
$6.82 - $7.91
54
$7.91 - $9.01
90
$9.01 - $10.10
156
$10.10 - $11.19
154
$11.19 - $12.28
147
$12.28 - $13.37
122
$13.37 - $14.47
87
$14.47 - $15.56
67
$15.56 - $16.65
39
$16.65 - $17.74
23
$17.74 - $18.84
17
$18.84 - $19.93
5
$19.93 - $21.02
10
$21.02 - $22.11
6
$22.11 - $23.20
2
$23.20 - $24.30
6
$24.30 - $25.39
0
$25.39 - $26.48
1
$26.48 - $27.57
1