Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Eversource Energy's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.3% to -6.9% 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 54, DPO 95, DIO 22). At a 5.8% WACC with mid-year discounting, the terminal value (85% 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 $244.22 per share, suggesting ES is undervalued by 259.1% at the current price of $68.00.
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 | 4,211 | 4,344 | 4,604 | 4,847 | 4,513 | 4,626 |
| (−) Net Interest | 972 | 1,003 | 1,063 | 1,119 | 1,042 | 1,068 |
| (+) D&A | 3,919 | 4,148 | 4,351 | 4,428 | 4,527 | 4,640 |
| EBITDA | 9,101 | 9,495 | 10,018 | 10,394 | 10,082 | 10,334 |
| (−) Tax | 926 | 955 | 1,012 | 1,066 | 992 | — |
| (−) CapEx | 4,320 | 4,457 | 4,724 | 4,973 | 4,630 | — |
| (−) ΔWC | -419 | 11 | 21 | 19 | -27 | — |
| Free Cash Flow (FCF) | 4,274 | 4,072 | 4,261 | 4,336 | 4,485 | — |
| Peers' EBITDA Multiple | 13.1x | |||||
| Terminal Value | 135,577 | |||||
| WACC / Discount Rate | 5.81% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,155 | 3,741 | 3,699 | 3,558 | 3,478 | 102,204 |
| Enterprise Value | 120,835 | |||||
| Projection Period | 18,631 | 15.4% | ||||
| Terminal Value | 102,204 | 84.6% | ||||
| (−) Current Net Debt | 30,146 | |||||
| Equity Value | 90,688 | |||||
| (÷) Outstanding Shares | 371M | |||||
| Fair Price | $244 | +259.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.1x | 11.1x | 13.1x | 15.1x | 17.1x |
|---|---|---|---|---|---|
| 3.8% | $182 | $228 | $274 | $320 | $366 |
| 4.8% | $171 | $215 | $259 | $303 | $347 |
| 5.8% | $160 | $202 | $244 | $286 | $328 |
| 6.8% | $150 | $190 | $230 | $270 | $311 |
| 7.8% | $141 | $179 | $217 | $256 | $294 |
Current price: $68.00. 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.