XII
Detailed Valuation Scenarios
================================================================================ VALUATION SCENARIOS - DISCOUNTED CASH FLOW (DCF) ANALYSIS ================================================================================ Stock: JPM Current Price: $312.47 Shares Outstanding: 2.80B (2,796,106,099 shares) Base Year FCF (FY 2024): $46.8B (from financial statements) -------------------------------------------------------------------------------- BEAR CASE (Probability: 25%) Conservative: Below-trend growth, elevated risk premium, modest recession impact ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 3.0% • Discount Rate (WACC): 12.0% • Terminal Growth Rate: 2.0% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $48,180,104,000 0.8929 $43,017,950,000 2 $49,625,507,120 0.7972 $39,561,150,446 3 $51,114,272,334 0.7118 $36,382,129,428 4 $52,647,700,504 0.6355 $33,458,565,456 5 $54,227,131,519 0.5674 $30,769,930,732 6 $55,853,945,464 0.5066 $28,297,347,013 7 $57,529,563,828 0.4523 $26,023,453,056 8 $59,255,450,743 0.4039 $23,932,282,721 9 $61,033,114,265 0.3606 $22,009,152,860 10 $62,864,107,693 0.3220 $20,240,560,219 ------------------------------------------------------------ Total PV of 10-Year FCF: $303,692,521,934 TERMINAL VALUE: • Year 11 FCF: $64,121,389,847 • Terminal Value: $641,213,898,472 • PV of Terminal Value: $206,453,714,238 VALUATION SUMMARY: • Enterprise Value: $510.1B • Shares Outstanding: 2.80B • Intrinsic Value per Share: $182.45 • Current Price: $312.47 • Upside/Downside: -41.6% • Margin of Safety: -71.3% -------------------------------------------------------------------------------- BASE CASE (Probability: 50%) Balanced: Sustainable growth trajectory, market-appropriate discount rate, realistic perpetuity assumptions ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 8.0% • Discount Rate (WACC): 10.0% • Terminal Growth Rate: 2.5% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $50,518,944,000 0.9091 $45,926,312,727 2 $54,560,459,520 0.8264 $45,091,288,860 3 $58,925,296,282 0.7513 $44,271,447,244 4 $63,639,319,984 0.6830 $43,466,511,839 5 $68,730,465,583 0.6209 $42,676,211,624 6 $74,228,902,829 0.5645 $41,900,280,504 7 $80,167,215,056 0.5132 $41,138,457,222 8 $86,580,592,260 0.4665 $40,390,485,272 9 $93,507,039,641 0.4241 $39,656,112,813 10 $100,987,602,812 0.3855 $38,935,092,580 ------------------------------------------------------------ Total PV of 10-Year FCF: $423,452,200,685 TERMINAL VALUE: • Year 11 FCF: $103,512,292,883 • Terminal Value: $1,380,163,905,103 • PV of Terminal Value: $532,112,931,925 VALUATION SUMMARY: • Enterprise Value: $955.6B • Shares Outstanding: 2.80B • Intrinsic Value per Share: $341.75 • Current Price: $312.47 • Upside/Downside: +9.4% • Margin of Safety: 8.6% -------------------------------------------------------------------------------- BULL CASE (Probability: 25%) Optimistic: Strong execution, market share gains, operating leverage, sustained competitive advantages ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 14.0% • Discount Rate (WACC): 9.0% • Terminal Growth Rate: 3.0% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $53,325,552,000 0.9174 $48,922,524,771 2 $60,791,129,280 0.8417 $51,166,677,283 3 $69,301,887,379 0.7722 $53,513,772,571 4 $79,004,151,612 0.7084 $55,968,532,781 5 $90,064,732,838 0.6499 $58,535,896,670 6 $102,673,795,435 0.5963 $61,221,029,545 7 $117,048,126,796 0.5470 $64,029,333,652 8 $133,434,864,548 0.5019 $66,966,459,049 9 $152,115,745,584 0.4604 $70,038,314,969 10 $173,411,949,966 0.4224 $73,251,081,711 ------------------------------------------------------------ Total PV of 10-Year FCF: $603,613,623,002 TERMINAL VALUE: • Year 11 FCF: $178,614,308,465 • Terminal Value: $2,976,905,141,087 • PV of Terminal Value: $1,257,476,902,699 VALUATION SUMMARY: • Enterprise Value: $1,861.1B • Shares Outstanding: 2.80B • Intrinsic Value per Share: $665.60 • Current Price: $312.47 • Upside/Downside: +113.0% • Margin of Safety: 53.1% -------------------------------------------------------------------------------- ================================================================================ SENSITIVITY ANALYSIS - Intrinsic Value per Share ================================================================================ How intrinsic value changes with different growth and discount rates: Growth → 3% 5% 8% 10% 12% 15% WACC ↓ ------------------------------------------------------------------ 8% $ 324 $ 379 $ 479↑ $ 560↑ $ 654↑ $ 824↑ 9% $ 274↓ $ 319 $ 400 $ 465↑ $ 541↑ $ 678↑ 10% $ 237↓ $ 274↓ $ 342 $ 396 $ 459↑ $ 572↑ 11% $ 209↓ $ 241↓ $ 298 $ 344 $ 396 $ 492↑ 12% $ 187↓ $ 214↓ $ 263↓ $ 302 $ 348 $ 429↑ Current Price: $312.47 Base FCF: $46,776,800,000M Terminal Growth: 2.5% (constant) Legend: ↑ = 30%+ upside | ↓ = 10%+ downside ================================================================================ ================================================================================ PROBABILITY-WEIGHTED VALUATION ================================================================================ Bear Case (182.45) × 25% = $45.61 Base Case (341.75) × 50% = $170.88 Bull Case (665.60) × 25% = $166.40 ======================================== Weighted Average Intrinsic Value: $382.89 Current Price: $312.47 Upside/Downside: +22.5% Margin of Safety: 18.4% ================================================================================