Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Ameriprise Financial, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.1% to 8.7% 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 352, DPO 112, DIO 60). At a 7.8% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1186.99 per share, suggesting AMP is undervalued by 164.1% at the current price of $449.50.
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 | 9,015 | 9,428 | 9,935 | 10,675 | 11,605 | 11,895 |
| (−) Net Interest | 326 | 341 | 360 | 387 | 420 | 431 |
| (+) D&A | 132 | 150 | 157 | 166 | 181 | 185 |
| EBITDA | 9,474 | 9,920 | 10,452 | 11,228 | 12,206 | 12,511 |
| (−) Tax | 1,797 | 1,879 | 1,980 | 2,128 | 2,313 | — |
| (−) CapEx | 209 | 218 | 230 | 247 | 268 | — |
| (−) ΔWC | 2,551 | 802 | 983 | 1,436 | 1,805 | — |
| Free Cash Flow (FCF) | 4,917 | 7,020 | 7,259 | 7,417 | 7,819 | — |
| Peers' EBITDA Multiple | 9.5x | |||||
| Terminal Value | 118,851 | |||||
| WACC / Discount Rate | 7.76% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,737 | 6,275 | 6,021 | 5,709 | 5,585 | 81,776 |
| Enterprise Value | 110,103 | |||||
| Projection Period | 28,327 | 25.7% | ||||
| Terminal Value | 81,776 | 74.3% | ||||
| (−) Current Net Debt | (4,241) | |||||
| Equity Value | 114,344 | |||||
| (÷) Outstanding Shares | 96M | |||||
| Fair Price | $1187 | +164.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 5.5x | 7.5x | 9.5x | 11.5x | 13.5x |
|---|---|---|---|---|---|
| 5.8% | $892 | $1088 | $1285 | $1481 | $1677 |
| 6.8% | $860 | $1047 | $1235 | $1422 | $1609 |
| 7.8% | $829 | $1008 | $1187 | $1366 | $1545 |
| 8.8% | $800 | $971 | $1142 | $1313 | $1483 |
| 9.8% | $773 | $936 | $1099 | $1262 | $1425 |
Current price: $449.50. 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.