Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Consolidated Edison, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.6% to 3.9% 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 86, DPO 113, DIO 31). At a 5.8% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $383.79 per share, suggesting ED is undervalued by 244.0% at the current price of $111.56.
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 | 6,253 | 6,515 | 6,727 | 6,840 | 7,109 | 7,287 |
| (−) Net Interest | 1,210 | 1,261 | 1,302 | 1,324 | 1,376 | 1,410 |
| (+) D&A | 4,430 | 4,651 | 4,871 | 5,061 | 5,213 | 5,344 |
| EBITDA | 11,894 | 12,427 | 12,900 | 13,225 | 13,699 | 14,041 |
| (−) Tax | 1,134 | 1,181 | 1,220 | 1,240 | 1,289 | — |
| (−) CapEx | 5,058 | 5,270 | 5,442 | 5,533 | 5,751 | — |
| (−) ΔWC | 191 | 110 | 89 | 48 | 113 | — |
| Free Cash Flow (FCF) | 5,510 | 5,865 | 6,150 | 6,404 | 6,545 | — |
| Peers' EBITDA Multiple | 13.1x | |||||
| Terminal Value | 183,798 | |||||
| WACC / Discount Rate | 5.84% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,356 | 5,387 | 5,337 | 5,251 | 5,071 | 138,412 |
| Enterprise Value | 164,814 | |||||
| Projection Period | 26,401 | 16.0% | ||||
| Terminal Value | 138,412 | 84.0% | ||||
| (−) Current Net Debt | 27,124 | |||||
| Equity Value | 137,690 | |||||
| (÷) Outstanding Shares | 359M | |||||
| Fair Price | $384 | +244.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.1x | 11.1x | 13.1x | 15.1x | 17.1x |
|---|---|---|---|---|---|
| 3.8% | $296 | $361 | $426 | $491 | $556 |
| 4.8% | $281 | $342 | $404 | $466 | $528 |
| 5.8% | $266 | $325 | $384 | $443 | $502 |
| 6.8% | $252 | $308 | $364 | $421 | $477 |
| 7.8% | $239 | $292 | $346 | $400 | $453 |
Current price: $111.56. 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.