Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Federal Realty Investment Trust's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.8% to 9.5% 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 71, DPO 176, DIO 60). At a 6.7% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $166.34 per share, suggesting FRT is undervalued by 59.9% at the current price of $104.02.
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 | 504 | 529 | 473 | 590 | 646 | 662 |
| (−) Net Interest | 189 | 198 | 177 | 221 | 242 | 248 |
| (+) D&A | 341 | 338 | 343 | 359 | 409 | 419 |
| EBITDA | 1,034 | 1,064 | 992 | 1,170 | 1,296 | 1,329 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 422 | 442 | 395 | 493 | 540 | — |
| (−) ΔWC | 34 | 4 | -8 | 17 | 8 | — |
| Free Cash Flow (FCF) | 579 | 618 | 605 | 660 | 748 | — |
| Peers' EBITDA Multiple | 17.2x | |||||
| Terminal Value | 22,829 | |||||
| WACC / Discount Rate | 6.73% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 560 | 561 | 514 | 525 | 558 | 16,486 |
| Enterprise Value | 19,205 | |||||
| Projection Period | 2,719 | 14.2% | ||||
| Terminal Value | 16,486 | 85.8% | ||||
| (−) Current Net Debt | 4,921 | |||||
| Equity Value | 14,284 | |||||
| (÷) Outstanding Shares | 86M | |||||
| Fair Price | $166 | +60.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.2x | 15.2x | 17.2x | 19.2x | 21.2x |
|---|---|---|---|---|---|
| 4.7% | $138 | $162 | $187 | $211 | $236 |
| 5.7% | $129 | $153 | $176 | $200 | $223 |
| 6.7% | $122 | $144 | $166 | $189 | $211 |
| 7.7% | $114 | $136 | $157 | $178 | $200 |
| 8.7% | $107 | $128 | $148 | $168 | $189 |
Current price: $104.02. 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.