Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Halliburton Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.3% to -0.3% 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 82, DPO 63, DIO 62). At a 7.1% WACC with mid-year discounting, the terminal value (65% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 6.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $34.65 per share, suggesting HAL is fairly valued by 11.9% at the current price of $39.30.
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 | 2,729 | 2,841 | 2,961 | 3,148 | 3,138 | 3,217 |
| (−) Net Interest | 530 | 552 | 575 | 612 | 610 | 625 |
| (+) D&A | 1,177 | 1,261 | 1,313 | 1,302 | 1,294 | 1,327 |
| EBITDA | 4,436 | 4,655 | 4,849 | 5,061 | 5,043 | 5,169 |
| (−) Tax | 422 | 439 | 457 | 486 | 485 | — |
| (−) CapEx | 1,219 | 1,270 | 1,323 | 1,406 | 1,402 | — |
| (−) ΔWC | 34 | 199 | 211 | 330 | -17 | — |
| Free Cash Flow (FCF) | 2,762 | 2,748 | 2,858 | 2,838 | 3,172 | — |
| Peers' EBITDA Multiple | 6.2x | |||||
| Terminal Value | 32,253 | |||||
| WACC / Discount Rate | 7.09% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,669 | 2,479 | 2,408 | 2,233 | 2,331 | 22,897 |
| Enterprise Value | 35,017 | |||||
| Projection Period | 12,120 | 34.6% | ||||
| Terminal Value | 22,897 | 65.4% | ||||
| (−) Current Net Debt | 5,927 | |||||
| Equity Value | 29,090 | |||||
| (÷) Outstanding Shares | 840M | |||||
| Fair Price | $35 | -11.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 2.2x | 4.2x | 6.2x | 8.2x | 10.2x |
|---|---|---|---|---|---|
| 5.1% | $19 | $28 | $38 | $48 | $57 |
| 6.1% | $18 | $27 | $36 | $45 | $55 |
| 7.1% | $17 | $26 | $35 | $43 | $52 |
| 8.1% | $16 | $25 | $33 | $41 | $50 |
| 9.1% | $16 | $24 | $32 | $40 | $48 |
Current price: $39.30. 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.