Using an unlevered Free Cash Flow to Firm (FCFF) model, we project General Mills, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -5.5% to -0.9% 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 37, DPO 114, DIO 56). At a 5.5% WACC with mid-year discounting, the terminal value (78% 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 $64.09 per share, suggesting GIS is undervalued by 78.2% at the current price of $35.96.
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 | 2,701 | 2,636 | 2,664 | 2,682 | 2,659 | 2,725 |
| (−) Net Interest | 427 | 417 | 421 | 424 | 421 | 431 |
| (+) D&A | 638 | 653 | 657 | 639 | 605 | 620 |
| EBITDA | 3,766 | 3,706 | 3,743 | 3,745 | 3,684 | 3,776 |
| (−) Tax | 523 | 510 | 515 | 519 | 514 | — |
| (−) CapEx | 606 | 592 | 598 | 602 | 597 | — |
| (−) ΔWC | 105 | 1 | -1 | -0 | 0 | — |
| Free Cash Flow (FCF) | 2,532 | 2,603 | 2,630 | 2,625 | 2,572 | — |
| Peers' EBITDA Multiple | 13.6x | |||||
| Terminal Value | 51,354 | |||||
| WACC / Discount Rate | 5.50% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,466 | 2,402 | 2,301 | 2,176 | 2,022 | 39,297 |
| Enterprise Value | 50,664 | |||||
| Projection Period | 11,366 | 22.4% | ||||
| Terminal Value | 39,297 | 77.6% | ||||
| (−) Current Net Debt | 14,933 | |||||
| Equity Value | 35,731 | |||||
| (÷) Outstanding Shares | 558M | |||||
| Fair Price | $64 | +78.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.6x | 11.6x | 13.6x | 15.6x | 17.6x |
|---|---|---|---|---|---|
| 3.5% | $49 | $61 | $72 | $84 | $95 |
| 4.5% | $46 | $57 | $68 | $79 | $90 |
| 5.5% | $43 | $54 | $64 | $74 | $85 |
| 6.5% | $41 | $51 | $60 | $70 | $80 |
| 7.5% | $38 | $47 | $57 | $66 | $76 |
Current price: $35.96. 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.