Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Cardinal Health, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 16.2% to 11.9% 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 21, DPO 56, DIO 30). At a 7.1% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $295.67 per share, suggesting CAH is undervalued by 41.9% at the current price of $208.36.
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 | 2,817 | 3,070 | 3,310 | 3,642 | 4,076 | 4,178 |
| (−) Net Interest | 182 | 198 | 214 | 235 | 263 | 270 |
| (+) D&A | 465 | 506 | 560 | 605 | 659 | 675 |
| EBITDA | 3,464 | 3,774 | 4,083 | 4,482 | 4,999 | 5,124 |
| (−) Tax | 105 | 114 | 123 | 136 | 152 | — |
| (−) CapEx | 603 | 657 | 708 | 779 | 872 | — |
| (−) ΔWC | 1,762 | -259 | -245 | -339 | -444 | — |
| Free Cash Flow (FCF) | 994 | 3,262 | 3,497 | 3,906 | 4,419 | — |
| Peers' EBITDA Multiple | 17.6x | |||||
| Terminal Value | 89,922 | |||||
| WACC / Discount Rate | 7.08% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 961 | 2,944 | 2,947 | 3,074 | 3,248 | 63,864 |
| Enterprise Value | 77,037 | |||||
| Projection Period | 13,173 | 17.1% | ||||
| Terminal Value | 63,864 | 82.9% | ||||
| (−) Current Net Debt | 5,471 | |||||
| Equity Value | 71,566 | |||||
| (÷) Outstanding Shares | 242M | |||||
| Fair Price | $296 | +41.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.5x | 15.5x | 17.5x | 19.5x | 21.5x |
|---|---|---|---|---|---|
| 5.1% | $259 | $292 | $325 | $358 | $391 |
| 6.1% | $247 | $278 | $310 | $341 | $373 |
| 7.1% | $236 | $266 | $296 | $326 | $356 |
| 8.1% | $225 | $254 | $282 | $311 | $340 |
| 9.1% | $215 | $242 | $270 | $297 | $324 |
Current price: $208.36. 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.