Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Bristol-Myers Squibb Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.7% to -1.8% 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 110, DPO 64, DIO 48). At a 6.7% WACC with mid-year discounting, the terminal value (73% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $50.12 per share, suggesting BMY is overvalued by 15.7% at the current price of $59.48.
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 | 9,110 | 8,931 | 7,918 | 7,207 | 7,081 | 7,258 |
| (−) Net Interest | 1,435 | 1,407 | 1,248 | 1,135 | 1,116 | 1,144 |
| (+) D&A | 1,172 | 1,212 | 1,218 | 1,181 | 1,117 | 1,145 |
| EBITDA | 11,717 | 11,550 | 10,384 | 9,523 | 9,313 | 9,546 |
| (−) Tax | 1,371 | 1,345 | 1,192 | 1,085 | 1,066 | — |
| (−) CapEx | 1,174 | 1,151 | 1,020 | 928 | 912 | — |
| (−) ΔWC | -343 | -261 | -1,478 | -1,039 | -184 | — |
| Free Cash Flow (FCF) | 9,515 | 9,316 | 9,650 | 8,548 | 7,519 | — |
| Peers' EBITDA Multiple | 14.6x | |||||
| Terminal Value | 139,751 | |||||
| WACC / Discount Rate | 6.72% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 9,211 | 8,449 | 8,201 | 6,807 | 5,610 | 100,933 |
| Enterprise Value | 139,211 | |||||
| Projection Period | 38,278 | 27.5% | ||||
| Terminal Value | 100,933 | 72.5% | ||||
| (−) Current Net Debt | 36,930 | |||||
| Equity Value | 102,281 | |||||
| (÷) Outstanding Shares | 2041M | |||||
| Fair Price | $50 | -15.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.6x | 12.6x | 14.6x | 16.6x | 18.6x |
|---|---|---|---|---|---|
| 4.7% | $41 | $48 | $56 | $63 | $71 |
| 5.7% | $39 | $46 | $53 | $60 | $67 |
| 6.7% | $37 | $43 | $50 | $57 | $64 |
| 7.7% | $35 | $41 | $47 | $54 | $60 |
| 8.7% | $33 | $39 | $45 | $51 | $57 |
Current price: $59.48. 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.