Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Citizens Financial Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -18.5% to 12.4% 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 970, DPO 30, DIO 60). At a 9.7% WACC with mid-year discounting, the terminal value (27% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $389.00 per share, suggesting CFG is undervalued by 560.6% at the current price of $58.89.
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 | 2,057 | 2,223 | 2,309 | 2,596 | 2,917 | 2,990 |
| (−) Net Interest | 2,181 | 2,357 | 2,448 | 2,751 | 3,092 | 3,170 |
| (+) D&A | 144 | 145 | 147 | 142 | 150 | 154 |
| EBITDA | 4,381 | 4,725 | 4,905 | 5,489 | 6,160 | 6,314 |
| (−) Tax | 437 | 472 | 491 | 551 | 620 | — |
| (−) CapEx | 129 | 140 | 145 | 163 | 184 | — |
| (−) ΔWC | -117,608 | 1,968 | 1,017 | 3,387 | 3,806 | — |
| Free Cash Flow (FCF) | 121,422 | 2,145 | 3,252 | 1,388 | 1,551 | — |
| Peers' EBITDA Multiple | 11.4x | |||||
| Terminal Value | 72,298 | |||||
| WACC / Discount Rate | 9.68% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 115,939 | 1,867 | 2,581 | 1,004 | 1,023 | 45,545 |
| Enterprise Value | 167,959 | |||||
| Projection Period | 122,414 | 72.9% | ||||
| Terminal Value | 45,545 | 27.1% | ||||
| (−) Current Net Debt | (1,445) | |||||
| Equity Value | 169,404 | |||||
| (÷) Outstanding Shares | 435M | |||||
| Fair Price | $389 | +560.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.4x | 9.4x | 11.4x | 13.4x | 15.4x |
|---|---|---|---|---|---|
| 7.7% | $362 | $382 | $402 | $422 | $442 |
| 8.7% | $357 | $376 | $395 | $415 | $434 |
| 9.7% | $352 | $371 | $389 | $407 | $426 |
| 10.7% | $348 | $365 | $383 | $400 | $418 |
| 11.7% | $343 | $360 | $377 | $394 | $410 |
Current price: $58.89. 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.