Can Claude Replace Investment Bankers? We Graded the Output.

How good is AI at building a DCF? In this episode, Debs and Graham continue their Claude for Excel series, this time prompting the tool to construct a full discounted cash flow valuation for Lululemon from a single instruction. The goal is to test what AI can and cannot do in real valuation workflows, and what that means for analysts working in equity research, investment banking and M&A.Graham walks through DCF fundamentals from first principles, covering future cash flow projections, WACC, terminal value and the inputs that genuinely drive valuation outcomes. He then opens Claude for Excel and gives it a structured prompt — anchored to consensus EPS estimates for stage one, with explicit instructions on modelling best practices including no hardcoded inputs in formulas, standard colour coding, and transparent assumption sourcing.The audit that follows is instructive on both fronts. Claude handles the structural build well — linking assumptions to formulas, applying the Gordon Growth formula correctly for terminal value, and producing a workable enterprise value output. But the limitations show up in the details that matter most for senior review: the free cash flow build conflates levered and unlevered measures, time period construction is simplistic rather than properly anchored to fiscal year ends and a valuation date, and some formula constructions are opaque enough that auditing them line by line would take longer than rebuilding the section manually.The verdict: a B-minus output. Workable as a first pass, but not yet at the level where it can be submitted without significant human review. The broader question the episode closes on is whether AI tools like Claude for Excel are positioned to replace the analyst role or to elevate it — with Graham making the case that the analyst job as historically defined is exactly the workflow these tools are now competent at, while the judgement-heavy associate role remains some distance from being automated.Key Discussion Points:DCF fundamentals: future cash flows, discount rates, terminal value and the inputs that actually drive valuation outcomes. Prompting strategy: how to structure a Claude for Excel prompt to anchor projections to consensus estimates and enforce modelling best practices. Where AI delivers: structural build, formula linking, Gordon Growth application, sensitivity analysis output. Where AI falls short: free cash flow build, time period construction, opaque formulas that resist quick audit. Sensitivity analysis: long term growth rate versus WACC as the two real swing factors in any DCF. AI in finance careers: the analyst role versus the associate role and what realistic automation looks like over the next 12 to 24 months.WTBD Newsletter: https://webmail.wallstreetprep.com/whats-the-big-dealFollow Us On Socials:LinkedIn: https://www.linkedin.com/company/wall-street-prep/Instagram: https://www.instagram.com/wallstreetprep/Resources: https://linktr.ee/wallstreetprep