Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Franklin Resources, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -20.6% to 1.0% 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 62, DPO 285, DIO 60). At a 5.0% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $49.37 per share, suggesting BEN is undervalued by 108.2% at the current price of $23.71.
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 | 1,945 | 2,062 | 2,177 | 2,310 | 2,334 | 2,392 |
| (−) Net Interest | 70 | 74 | 78 | 83 | 83 | 86 |
| (+) D&A | 130 | 136 | 141 | 135 | 126 | 129 |
| EBITDA | 2,144 | 2,271 | 2,395 | 2,528 | 2,543 | 2,606 |
| (−) Tax | 455 | 482 | 509 | 540 | 546 | — |
| (−) CapEx | 108 | 115 | 121 | 129 | 130 | — |
| (−) ΔWC | 523 | 23 | 23 | 27 | 5 | — |
| Free Cash Flow (FCF) | 1,058 | 1,651 | 1,742 | 1,833 | 1,862 | — |
| Peers' EBITDA Multiple | 13.7x | |||||
| Terminal Value | 35,760 | |||||
| WACC / Discount Rate | 5.00% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,033 | 1,534 | 1,542 | 1,545 | 1,495 | 28,019 |
| Enterprise Value | 35,168 | |||||
| Projection Period | 7,149 | 20.3% | ||||
| Terminal Value | 28,019 | 79.7% | ||||
| (−) Current Net Debt | 9,726 | |||||
| Equity Value | 25,442 | |||||
| (÷) Outstanding Shares | 515M | |||||
| Fair Price | $49 | +108.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.7x | 11.7x | 13.7x | 15.7x | 17.7x |
|---|---|---|---|---|---|
| 3.0% | $38 | $47 | $56 | $64 | $73 |
| 4.0% | $36 | $44 | $52 | $61 | $69 |
| 5.0% | $34 | $41 | $49 | $57 | $65 |
| 6.0% | $31 | $39 | $47 | $54 | $62 |
| 7.0% | $29 | $37 | $44 | $51 | $58 |
Current price: $23.71. 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.