Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Amgen Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.0% to 3.3% 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 90, DPO 200, DIO 267). At a 7.4% WACC with mid-year discounting, the terminal value (84% 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 $259.51 per share, suggesting AMGN is overvalued by 26.4% at the current price of $352.54.
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 | 8,904 | 9,146 | 9,359 | 9,742 | 10,060 | 10,311 |
| (−) Net Interest | 2,807 | 2,883 | 2,950 | 3,070 | 3,171 | 3,250 |
| (+) D&A | 1,176 | 1,291 | 1,403 | 1,486 | 1,586 | 1,625 |
| EBITDA | 12,887 | 13,320 | 13,712 | 14,299 | 14,816 | 15,186 |
| (−) Tax | 1,117 | 1,147 | 1,174 | 1,222 | 1,262 | — |
| (−) CapEx | 1,455 | 1,494 | 1,529 | 1,592 | 1,644 | — |
| (−) ΔWC | 16,463 | 309 | 272 | 489 | 406 | — |
| Free Cash Flow (FCF) | -6,147 | 10,370 | 10,737 | 10,997 | 11,505 | — |
| Peers' EBITDA Multiple | 14.8x | |||||
| Terminal Value | 224,456 | |||||
| WACC / Discount Rate | 7.42% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -5,931 | 9,314 | 8,978 | 8,559 | 8,336 | 156,923 |
| Enterprise Value | 186,180 | |||||
| Projection Period | 29,257 | 15.7% | ||||
| Terminal Value | 156,923 | 84.3% | ||||
| (−) Current Net Debt | 45,475 | |||||
| Equity Value | 140,705 | |||||
| (÷) Outstanding Shares | 542M | |||||
| Fair Price | $260 | -26.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.8x | 12.8x | 14.8x | 16.8x | 18.8x |
|---|---|---|---|---|---|
| 5.4% | $206 | $249 | $292 | $335 | $378 |
| 6.4% | $193 | $234 | $275 | $316 | $357 |
| 7.4% | $181 | $220 | $260 | $299 | $338 |
| 8.4% | $170 | $207 | $245 | $282 | $320 |
| 9.4% | $159 | $195 | $231 | $266 | $302 |
Current price: $352.54. 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.