Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Deere & Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -8.0% to 0.9% 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 391, DPO 37, DIO 87). At a 8.2% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $637.20 per share, suggesting DE is fairly valued by 9.0% at the current price of $584.39.
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 | 7,532 | 8,259 | 9,232 | 9,319 | 9,406 | 9,641 |
| (−) Net Interest | 1,823 | 1,999 | 2,235 | 2,255 | 2,277 | 2,333 |
| (+) D&A | 3,973 | 4,111 | 4,071 | 3,978 | 3,827 | 3,923 |
| EBITDA | 13,329 | 14,369 | 15,538 | 15,553 | 15,510 | 15,897 |
| (−) Tax | 1,637 | 1,795 | 2,007 | 2,026 | 2,045 | — |
| (−) CapEx | 3,270 | 3,585 | 4,008 | 4,045 | 4,083 | — |
| (−) ΔWC | -13,942 | 4,601 | 6,165 | 547 | 552 | — |
| Free Cash Flow (FCF) | 22,363 | 4,387 | 3,358 | 8,935 | 8,830 | — |
| Peers' EBITDA Multiple | 17.5x | |||||
| Terminal Value | 278,043 | |||||
| WACC / Discount Rate | 8.18% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 21,502 | 3,900 | 2,759 | 6,787 | 6,200 | 187,692 |
| Enterprise Value | 228,839 | |||||
| Projection Period | 41,146 | 18.0% | ||||
| Terminal Value | 187,692 | 82.0% | ||||
| (−) Current Net Debt | 55,660 | |||||
| Equity Value | 173,179 | |||||
| (÷) Outstanding Shares | 272M | |||||
| Fair Price | $637 | +9.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.5x | 15.5x | 17.5x | 19.5x | 21.5x |
|---|---|---|---|---|---|
| 6.2% | $537 | $623 | $710 | $797 | $884 |
| 7.2% | $507 | $590 | $673 | $755 | $838 |
| 8.2% | $479 | $558 | $637 | $716 | $795 |
| 9.2% | $453 | $528 | $604 | $679 | $755 |
| 10.2% | $428 | $500 | $572 | $644 | $716 |
Current price: $584.39. 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.