Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Danaher Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 4.8% 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 67, DPO 70, DIO 93). At a 7.2% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $183.64 per share, suggesting DHR is fairly valued by 2.7% at the current price of $188.68.
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 | 5,908 | 6,255 | 6,650 | 7,032 | 7,369 | 7,553 |
| (−) Net Interest | 259 | 274 | 291 | 308 | 323 | 331 |
| (+) D&A | 1,275 | 1,273 | 1,315 | 1,327 | 1,354 | 1,388 |
| EBITDA | 7,442 | 7,802 | 8,256 | 8,667 | 9,046 | 9,272 |
| (−) Tax | 885 | 937 | 997 | 1,054 | 1,104 | — |
| (−) CapEx | 1,283 | 1,359 | 1,444 | 1,527 | 1,601 | — |
| (−) ΔWC | 788 | 314 | 357 | 346 | 305 | — |
| Free Cash Flow (FCF) | 4,485 | 5,192 | 5,457 | 5,740 | 6,036 | — |
| Peers' EBITDA Multiple | 18.6x | |||||
| Terminal Value | 172,737 | |||||
| WACC / Discount Rate | 7.23% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,331 | 4,676 | 4,583 | 4,496 | 4,409 | 121,847 |
| Enterprise Value | 144,342 | |||||
| Projection Period | 22,495 | 15.6% | ||||
| Terminal Value | 121,847 | 84.4% | ||||
| (−) Current Net Debt | 13,803 | |||||
| Equity Value | 130,539 | |||||
| (÷) Outstanding Shares | 711M | |||||
| Fair Price | $184 | -2.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.6x | 16.6x | 18.6x | 20.6x | 22.6x |
|---|---|---|---|---|---|
| 5.2% | $162 | $182 | $202 | $222 | $243 |
| 6.2% | $154 | $173 | $193 | $212 | $231 |
| 7.2% | $147 | $165 | $184 | $202 | $220 |
| 8.2% | $140 | $158 | $175 | $193 | $210 |
| 9.2% | $134 | $150 | $167 | $184 | $201 |
Current price: $188.68. 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.