Using an unlevered Free Cash Flow to Firm (FCFF) model, we project DTE Energy Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -4.8% to 4.3% 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 48, DPO 94, DIO 38). At a 6.0% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $496.58 per share, suggesting DTE is undervalued by 243.0% at the current price of $144.78.
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 | 5,015 | 5,256 | 5,363 | 5,130 | 5,347 | 5,481 |
| (−) Net Interest | 850 | 891 | 909 | 869 | 906 | 929 |
| (+) D&A | 3,996 | 4,069 | 4,261 | 4,359 | 4,312 | 4,420 |
| EBITDA | 9,861 | 10,216 | 10,533 | 10,358 | 10,566 | 10,830 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 4,138 | 4,337 | 4,425 | 4,232 | 4,412 | — |
| (−) ΔWC | 175 | 27 | 12 | -27 | 25 | — |
| Free Cash Flow (FCF) | 5,548 | 5,852 | 6,096 | 6,152 | 6,129 | — |
| Peers' EBITDA Multiple | 12.8x | |||||
| Terminal Value | 138,081 | |||||
| WACC / Discount Rate | 5.97% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,390 | 5,365 | 5,273 | 5,022 | 4,722 | 103,336 |
| Enterprise Value | 129,108 | |||||
| Projection Period | 25,772 | 20.0% | ||||
| Terminal Value | 103,336 | 80.0% | ||||
| (−) Current Net Debt | 26,275 | |||||
| Equity Value | 102,833 | |||||
| (÷) Outstanding Shares | 207M | |||||
| Fair Price | $497 | +243.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.7x | 10.7x | 12.7x | 14.7x | 16.7x |
|---|---|---|---|---|---|
| 4.0% | $380 | $466 | $552 | $639 | $725 |
| 5.0% | $360 | $442 | $524 | $606 | $688 |
| 6.0% | $340 | $418 | $497 | $575 | $653 |
| 7.0% | $321 | $396 | $471 | $546 | $620 |
| 8.0% | $304 | $375 | $447 | $518 | $589 |
Current price: $144.78. 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.