Using an unlevered Free Cash Flow to Firm (FCFF) model, we project GE Aerospace's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.9% to 9.1% 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 141, DPO 156, DIO 170). At a 8.7% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $154.40 per share, suggesting GE is overvalued by 45.7% at the current price of $284.50.
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 | 5,236 | 5,789 | 6,298 | 6,768 | 7,384 | 7,569 |
| (−) Net Interest | 1,449 | 1,602 | 1,743 | 1,873 | 2,043 | 2,094 |
| (+) D&A | 1,237 | 1,322 | 1,426 | 1,476 | 1,667 | 1,709 |
| EBITDA | 7,922 | 8,713 | 9,467 | 10,118 | 11,095 | 11,372 |
| (−) Tax | 619 | 685 | 745 | 800 | 873 | — |
| (−) CapEx | 1,535 | 1,697 | 1,846 | 1,984 | 2,164 | — |
| (−) ΔWC | 2,733 | 2,093 | 1,924 | 1,780 | 2,331 | — |
| Free Cash Flow (FCF) | 3,035 | 4,238 | 4,952 | 5,554 | 5,726 | — |
| Peers' EBITDA Multiple | 20.6x | |||||
| Terminal Value | 234,265 | |||||
| WACC / Discount Rate | 8.74% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,911 | 3,738 | 4,016 | 4,143 | 3,928 | 154,117 |
| Enterprise Value | 172,853 | |||||
| Projection Period | 18,736 | 10.8% | ||||
| Terminal Value | 154,117 | 89.2% | ||||
| (−) Current Net Debt | 8,102 | |||||
| Equity Value | 164,751 | |||||
| (÷) Outstanding Shares | 1067M | |||||
| Fair Price | $154 | -45.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.6x | 18.6x | 20.6x | 22.6x | 24.6x |
|---|---|---|---|---|---|
| 6.7% | $139 | $154 | $169 | $185 | $200 |
| 7.7% | $132 | $147 | $162 | $176 | $191 |
| 8.7% | $126 | $140 | $154 | $168 | $182 |
| 9.7% | $121 | $134 | $148 | $161 | $174 |
| 10.7% | $115 | $128 | $141 | $154 | $167 |
Current price: $284.50. 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.