Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Entergy Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 6.4% 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 42, DPO 92, DIO 78). At a 5.9% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $307.28 per share, suggesting ETR is undervalued by 199.3% at the current price of $102.67.
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 | 3,754 | 4,063 | 4,373 | 4,782 | 5,090 | 5,217 |
| (−) Net Interest | 1,190 | 1,288 | 1,386 | 1,516 | 1,614 | 1,654 |
| (+) D&A | 6,067 | 6,143 | 6,559 | 7,202 | 7,742 | 7,935 |
| EBITDA | 11,011 | 11,494 | 12,319 | 13,500 | 14,445 | 14,806 |
| (−) Tax | 135 | 146 | 157 | 172 | 183 | — |
| (−) CapEx | 6,805 | 7,365 | 7,928 | 8,669 | 9,227 | — |
| (−) ΔWC | 509 | 106 | 107 | 140 | 106 | — |
| Free Cash Flow (FCF) | 3,562 | 3,877 | 4,127 | 4,519 | 4,930 | — |
| Peers' EBITDA Multiple | 13.6x | |||||
| Terminal Value | 201,218 | |||||
| WACC / Discount Rate | 5.90% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,461 | 3,558 | 3,576 | 3,698 | 3,809 | 151,088 |
| Enterprise Value | 169,189 | |||||
| Projection Period | 18,102 | 10.7% | ||||
| Terminal Value | 151,088 | 89.3% | ||||
| (−) Current Net Debt | 30,889 | |||||
| Equity Value | 138,300 | |||||
| (÷) Outstanding Shares | 450M | |||||
| Fair Price | $307 | +199.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.6x | 11.6x | 13.6x | 15.6x | 17.6x |
|---|---|---|---|---|---|
| 3.9% | $234 | $289 | $343 | $397 | $452 |
| 4.9% | $221 | $273 | $325 | $376 | $428 |
| 5.9% | $208 | $258 | $307 | $357 | $406 |
| 6.9% | $197 | $244 | $291 | $338 | $385 |
| 7.9% | $185 | $230 | $275 | $320 | $365 |
Current price: $102.67. 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.