Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Chubb Limited's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.2% to 9.9% 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 218, DPO 84, DIO 60). At a 7.5% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $458.32 per share, suggesting CB is undervalued by 41.2% at the current price of $324.50.
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 | 12,843 | 13,583 | 14,247 | 15,665 | 17,223 | 17,654 |
| (−) Net Interest | 755 | 798 | 837 | 920 | 1,012 | 1,037 |
| (+) D&A | 0 | 583 | 1,199 | 1,845 | 2,556 | 2,620 |
| EBITDA | 13,597 | 14,964 | 16,283 | 18,430 | 20,791 | 21,311 |
| (−) Tax | 1,845 | 1,952 | 2,047 | 2,251 | 2,475 | — |
| (−) CapEx | 2,913 | 3,081 | 3,232 | 3,554 | 3,907 | — |
| (−) ΔWC | 16,219 | 1,854 | 1,663 | 3,550 | 3,903 | — |
| Free Cash Flow (FCF) | -7,380 | 8,077 | 9,341 | 9,076 | 10,506 | — |
| Peers' EBITDA Multiple | 12.0x | |||||
| Terminal Value | 256,584 | |||||
| WACC / Discount Rate | 7.48% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -7,118 | 7,248 | 7,799 | 7,050 | 7,593 | 178,869 |
| Enterprise Value | 201,442 | |||||
| Projection Period | 22,573 | 11.2% | ||||
| Terminal Value | 178,869 | 88.8% | ||||
| (−) Current Net Debt | 19,717 | |||||
| Equity Value | 181,725 | |||||
| (÷) Outstanding Shares | 397M | |||||
| Fair Price | $458 | +41.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.0x | 10.0x | 12.0x | 14.0x | 16.0x |
|---|---|---|---|---|---|
| 5.5% | $342 | $425 | $507 | $589 | $672 |
| 6.5% | $325 | $403 | $482 | $560 | $639 |
| 7.5% | $308 | $383 | $458 | $533 | $608 |
| 8.5% | $293 | $364 | $436 | $507 | $579 |
| 9.5% | $278 | $346 | $415 | $483 | $551 |
Current price: $324.50. 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.