Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CF Industries Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -5.4% to 5.5% 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 25, DPO 19, DIO 31). At a 8.1% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $244.82 per share, suggesting CF is undervalued by 86.1% at the current price of $131.53.
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 | 2,259 | 2,145 | 2,132 | 2,045 | 2,157 | 2,211 |
| (−) Net Interest | 166 | 158 | 157 | 150 | 158 | 162 |
| (+) D&A | 591 | 598 | 612 | 618 | 616 | 631 |
| EBITDA | 3,016 | 2,901 | 2,901 | 2,813 | 2,931 | 3,005 |
| (−) Tax | 430 | 408 | 406 | 389 | 411 | — |
| (−) CapEx | 561 | 533 | 529 | 508 | 536 | — |
| (−) ΔWC | 401 | -30 | -3 | -23 | 29 | — |
| Free Cash Flow (FCF) | 1,624 | 1,990 | 1,969 | 1,939 | 1,956 | — |
| Peers' EBITDA Multiple | 16.6x | |||||
| Terminal Value | 49,905 | |||||
| WACC / Discount Rate | 8.07% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,563 | 1,771 | 1,622 | 1,478 | 1,379 | 33,860 |
| Enterprise Value | 41,673 | |||||
| Projection Period | 7,813 | 18.7% | ||||
| Terminal Value | 33,860 | 81.3% | ||||
| (−) Current Net Debt | 1,965 | |||||
| Equity Value | 39,708 | |||||
| (÷) Outstanding Shares | 162M | |||||
| Fair Price | $245 | +86.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.6x | 14.6x | 16.6x | 18.6x | 20.6x |
|---|---|---|---|---|---|
| 6.1% | $212 | $240 | $268 | $295 | $323 |
| 7.1% | $203 | $230 | $256 | $282 | $309 |
| 8.1% | $195 | $220 | $245 | $270 | $295 |
| 9.1% | $186 | $210 | $234 | $258 | $282 |
| 10.1% | $179 | $202 | $224 | $247 | $270 |
Current price: $131.53. 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.