Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Huntington Bancshares Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -8.6% to 19.7% 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 288, DPO 30, DIO 60). At a 10.8% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $30.96 per share, suggesting HBAN is undervalued by 99.6% at the current price of $15.51.
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 | 2,318 | 2,530 | 2,609 | 3,123 | 3,738 | 3,832 |
| (−) Net Interest | 2,631 | 2,871 | 2,960 | 3,543 | 4,242 | 4,348 |
| (+) D&A | 202 | 205 | 219 | 249 | 290 | 298 |
| EBITDA | 5,151 | 5,606 | 5,787 | 6,915 | 8,270 | 8,477 |
| (−) Tax | 417 | 455 | 469 | 562 | 672 | — |
| (−) CapEx | 260 | 283 | 292 | 350 | 419 | — |
| (−) ΔWC | 9,244 | 844 | 313 | 2,050 | 2,454 | — |
| Free Cash Flow (FCF) | -4,769 | 4,023 | 4,712 | 3,954 | 4,725 | — |
| Peers' EBITDA Multiple | 10.8x | |||||
| Terminal Value | 91,635 | |||||
| WACC / Discount Rate | 10.76% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -4,532 | 3,452 | 3,650 | 2,765 | 2,983 | 54,972 |
| Enterprise Value | 63,290 | |||||
| Projection Period | 8,318 | 13.1% | ||||
| Terminal Value | 54,972 | 86.9% | ||||
| (−) Current Net Debt | 16,699 | |||||
| Equity Value | 46,591 | |||||
| (÷) Outstanding Shares | 1505M | |||||
| Fair Price | $31 | +99.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.8x | 8.8x | 10.8x | 12.8x | 14.8x |
|---|---|---|---|---|---|
| 8.8% | $20 | $27 | $35 | $42 | $50 |
| 9.8% | $19 | $26 | $33 | $40 | $47 |
| 10.8% | $17 | $24 | $31 | $38 | $44 |
| 11.8% | $16 | $23 | $29 | $36 | $42 |
| 12.8% | $15 | $21 | $27 | $34 | $40 |
Current price: $15.51. 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.