Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Carrier Global Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 1.4% 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 50, DPO 64, DIO 56). At a 8.0% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 23.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $60.50 per share, suggesting CARR is fairly valued by 9.3% at the current price of $55.33.
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 | 1,957 | 2,056 | 2,154 | 2,381 | 2,413 | 2,473 |
| (−) Net Interest | 399 | 419 | 439 | 485 | 492 | 504 |
| (+) D&A | 402 | 421 | 449 | 457 | 460 | 471 |
| EBITDA | 2,758 | 2,895 | 3,042 | 3,323 | 3,364 | 3,448 |
| (−) Tax | 529 | 555 | 582 | 643 | 652 | — |
| (−) CapEx | 436 | 458 | 480 | 531 | 538 | — |
| (−) ΔWC | 237 | 134 | 134 | 308 | 44 | — |
| Free Cash Flow (FCF) | 1,556 | 1,748 | 1,847 | 1,842 | 2,131 | — |
| Peers' EBITDA Multiple | 23.4x | |||||
| Terminal Value | 80,655 | |||||
| WACC / Discount Rate | 8.02% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,497 | 1,557 | 1,523 | 1,406 | 1,506 | 54,844 |
| Enterprise Value | 62,333 | |||||
| Projection Period | 7,489 | 12.0% | ||||
| Terminal Value | 54,844 | 88.0% | ||||
| (−) Current Net Debt | 11,114 | |||||
| Equity Value | 51,219 | |||||
| (÷) Outstanding Shares | 847M | |||||
| Fair Price | $60 | +9.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 19.4x | 21.4x | 23.4x | 25.4x | 27.4x |
|---|---|---|---|---|---|
| 6.0% | $55 | $61 | $67 | $73 | $79 |
| 7.0% | $52 | $58 | $64 | $70 | $75 |
| 8.0% | $49 | $55 | $61 | $66 | $72 |
| 9.0% | $47 | $52 | $57 | $63 | $68 |
| 10.0% | $44 | $49 | $54 | $59 | $65 |
Current price: $55.33. 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.