Using an unlevered Free Cash Flow to Firm (FCFF) model, we project FirstEnergy Corp.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -1.1% to 2.5% 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 46, DPO 113, DIO 36). At a 5.7% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $258.24 per share, suggesting FE is undervalued by 414.8% at the current price of $50.16.
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 | 8,401 | 8,723 | 9,160 | 8,961 | 9,186 | 9,416 |
| (−) Net Interest | 1,202 | 1,248 | 1,310 | 1,282 | 1,314 | 1,347 |
| (+) D&A | 3,458 | 3,753 | 4,015 | 4,198 | 4,228 | 4,333 |
| EBITDA | 13,061 | 13,723 | 14,485 | 14,441 | 14,728 | 15,096 |
| (−) Tax | 2,551 | 2,648 | 2,781 | 2,721 | 2,789 | — |
| (−) CapEx | 3,917 | 4,067 | 4,271 | 4,178 | 4,283 | — |
| (−) ΔWC | 141 | 28 | 38 | -17 | 20 | — |
| Free Cash Flow (FCF) | 6,453 | 6,980 | 7,395 | 7,560 | 7,636 | — |
| Peers' EBITDA Multiple | 12.7x | |||||
| Terminal Value | 191,263 | |||||
| WACC / Discount Rate | 5.71% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 6,276 | 6,422 | 6,436 | 6,224 | 5,947 | 144,874 |
| Enterprise Value | 176,178 | |||||
| Projection Period | 31,304 | 17.8% | ||||
| Terminal Value | 144,874 | 82.2% | ||||
| (−) Current Net Debt | 26,971 | |||||
| Equity Value | 149,207 | |||||
| (÷) Outstanding Shares | 578M | |||||
| Fair Price | $258 | +414.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.7x | 10.7x | 12.7x | 14.7x | 16.7x |
|---|---|---|---|---|---|
| 3.7% | $199 | $242 | $286 | $330 | $373 |
| 4.7% | $189 | $230 | $272 | $313 | $355 |
| 5.7% | $179 | $219 | $258 | $298 | $337 |
| 6.7% | $170 | $208 | $245 | $283 | $321 |
| 7.7% | $161 | $197 | $233 | $269 | $305 |
Current price: $50.16. 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.