Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Cigna Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.6% to 10.5% 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 34, DPO 50, DIO 11). At a 7.0% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1160.20 per share, suggesting CI is undervalued by 326.4% at the current price of $272.11.
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 | 13,080 | 13,858 | 14,685 | 16,196 | 17,901 | 18,349 |
| (−) Net Interest | 1,822 | 1,930 | 2,045 | 2,256 | 2,493 | 2,556 |
| (+) D&A | 1,328 | 1,461 | 1,588 | 1,682 | 1,852 | 1,898 |
| EBITDA | 16,230 | 17,249 | 18,319 | 20,134 | 22,246 | 22,802 |
| (−) Tax | 2,302 | 2,438 | 2,584 | 2,850 | 3,150 | — |
| (−) CapEx | 1,821 | 1,929 | 2,044 | 2,254 | 2,492 | — |
| (−) ΔWC | -25,754 | -18 | -19 | -35 | -40 | — |
| Free Cash Flow (FCF) | 37,862 | 12,900 | 13,710 | 15,066 | 16,645 | — |
| Peers' EBITDA Multiple | 15.3x | |||||
| Terminal Value | 348,878 | |||||
| WACC / Discount Rate | 7.04% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 36,597 | 11,649 | 11,567 | 11,875 | 12,257 | 248,330 |
| Enterprise Value | 332,275 | |||||
| Projection Period | 83,946 | 25.3% | ||||
| Terminal Value | 248,330 | 74.7% | ||||
| (−) Current Net Debt | 23,787 | |||||
| Equity Value | 308,488 | |||||
| (÷) Outstanding Shares | 266M | |||||
| Fair Price | $1160 | +326.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 11.3x | 13.3x | 15.3x | 17.3x | 19.3x |
|---|---|---|---|---|---|
| 5.0% | $996 | $1130 | $1264 | $1398 | $1533 |
| 6.0% | $955 | $1083 | $1211 | $1339 | $1467 |
| 7.0% | $916 | $1038 | $1160 | $1282 | $1404 |
| 8.0% | $879 | $996 | $1112 | $1229 | $1345 |
| 9.0% | $844 | $955 | $1067 | $1178 | $1289 |
Current price: $272.11. 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.