Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Abbott Laboratories's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.0% to 7.2% 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 58, DPO 78, DIO 110). At a 7.5% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $120.32 per share, suggesting ABT is fairly valued by 14.4% at the current price of $105.16.
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 | 8,446 | 9,076 | 9,728 | 10,336 | 11,084 | 11,361 |
| (−) Net Interest | 538 | 578 | 620 | 659 | 706 | 724 |
| (+) D&A | 2,048 | 2,133 | 2,273 | 2,365 | 2,488 | 2,550 |
| EBITDA | 11,032 | 11,787 | 12,621 | 13,359 | 14,278 | 14,635 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 2,308 | 2,480 | 2,658 | 2,824 | 3,028 | — |
| (−) ΔWC | -564 | 717 | 742 | 692 | 851 | — |
| Free Cash Flow (FCF) | 9,289 | 8,590 | 9,221 | 9,843 | 10,399 | — |
| Peers' EBITDA Multiple | 17.4x | |||||
| Terminal Value | 254,215 | |||||
| WACC / Discount Rate | 7.48% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 8,960 | 7,709 | 7,699 | 7,647 | 7,516 | 177,229 |
| Enterprise Value | 216,760 | |||||
| Projection Period | 39,531 | 18.2% | ||||
| Terminal Value | 177,229 | 81.8% | ||||
| (−) Current Net Debt | 6,545 | |||||
| Equity Value | 210,215 | |||||
| (÷) Outstanding Shares | 1747M | |||||
| Fair Price | $120 | +14.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.4x | 15.4x | 17.4x | 19.4x | 21.4x |
|---|---|---|---|---|---|
| 5.5% | $106 | $119 | $131 | $144 | $157 |
| 6.5% | $101 | $113 | $126 | $138 | $150 |
| 7.5% | $97 | $109 | $120 | $132 | $144 |
| 8.5% | $93 | $104 | $115 | $126 | $138 |
| 9.5% | $89 | $100 | $110 | $121 | $132 |
Current price: $105.16. 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.