Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Colgate-Palmolive Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.5% to 2.4% 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 29, DPO 77, DIO 90). At a 6.5% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $86.09 per share, suggesting CL is fairly valued by 1.6% at the current price of $84.72.
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 | 4,199 | 4,345 | 4,508 | 4,652 | 4,765 | 4,884 |
| (−) Net Interest | 249 | 257 | 267 | 275 | 282 | 289 |
| (+) D&A | 619 | 644 | 649 | 657 | 699 | 716 |
| EBITDA | 5,067 | 5,246 | 5,423 | 5,584 | 5,746 | 5,890 |
| (−) Tax | 1,066 | 1,103 | 1,145 | 1,181 | 1,210 | — |
| (−) CapEx | 695 | 719 | 746 | 770 | 788 | — |
| (−) ΔWC | -1,702 | 69 | 78 | 69 | 54 | — |
| Free Cash Flow (FCF) | 5,008 | 3,355 | 3,455 | 3,565 | 3,694 | — |
| Peers' EBITDA Multiple | 14.0x | |||||
| Terminal Value | 82,395 | |||||
| WACC / Discount Rate | 6.54% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,852 | 3,051 | 2,949 | 2,856 | 2,777 | 60,025 |
| Enterprise Value | 76,509 | |||||
| Projection Period | 16,484 | 21.5% | ||||
| Terminal Value | 60,025 | 78.5% | ||||
| (−) Current Net Debt | 6,700 | |||||
| Equity Value | 69,809 | |||||
| (÷) Outstanding Shares | 811M | |||||
| Fair Price | $86 | +1.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.0x | 12.0x | 14.0x | 16.0x | 18.0x |
|---|---|---|---|---|---|
| 4.5% | $71 | $83 | $94 | $106 | $118 |
| 5.5% | $68 | $79 | $90 | $101 | $112 |
| 6.5% | $65 | $76 | $86 | $97 | $107 |
| 7.5% | $62 | $72 | $82 | $92 | $102 |
| 8.5% | $59 | $69 | $79 | $88 | $98 |
Current price: $84.72. 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.