Using an unlevered Free Cash Flow to Firm (FCFF) model, we project AbbVie Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 9.8% to 1.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 71, DPO 77, DIO 97). At a 7.2% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $175.96 per share, suggesting ABBV is overvalued by 16.6% at the current price of $210.95.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 18,164 | 19,640 | 21,084 | 22,239 | 22,623 | 23,189 |
| (−) Net Interest | 2,891 | 3,126 | 3,356 | 3,539 | 3,601 | 3,691 |
| (+) D&A | 889 | 940 | 1,026 | 1,112 | 1,172 | 1,201 |
| EBITDA | 21,944 | 23,706 | 25,466 | 26,890 | 27,395 | 28,080 |
| (−) Tax | 2,388 | 2,582 | 2,771 | 2,923 | 2,974 | — |
| (−) CapEx | 1,040 | 1,124 | 1,207 | 1,273 | 1,295 | — |
| (−) ΔWC | 179 | 1,148 | 1,124 | 898 | 299 | — |
| Free Cash Flow (FCF) | 18,337 | 18,852 | 20,364 | 21,796 | 22,828 | — |
| Peers' EBITDA Multiple | 14.8x | |||||
| Terminal Value | 415,026 | |||||
| WACC / Discount Rate | 7.18% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 17,712 | 16,989 | 17,122 | 17,098 | 16,707 | 293,389 |
| Enterprise Value | 379,016 | |||||
| Projection Period | 85,627 | 22.6% | ||||
| Terminal Value | 293,389 | 77.4% | ||||
| (−) Current Net Debt | 63,839 | |||||
| Equity Value | 315,177 | |||||
| (÷) Outstanding Shares | 1791M | |||||
| Fair Price | $176 | -16.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.8x | 12.8x | 14.8x | 16.8x | 18.8x |
|---|---|---|---|---|---|
| 5.2% | $146 | $170 | $194 | $219 | $243 |
| 6.2% | $138 | $162 | $185 | $208 | $231 |
| 7.2% | $132 | $154 | $176 | $198 | $220 |
| 8.2% | $125 | $146 | $167 | $189 | $210 |
| 9.2% | $119 | $139 | $159 | $180 | $200 |
Current price: $210.95. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.