Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Hartford Financial Services Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.5% to 6.9% 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 148, DPO 12, DIO 60). At a 7.7% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 6.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $81.62 per share, suggesting HIG is overvalued by 39.5% at the current price of $134.85.
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 | 3,910 | 4,071 | 3,954 | 4,227 | 4,518 | 4,631 |
| (−) Net Interest | 258 | 269 | 261 | 279 | 298 | 306 |
| (+) D&A | 167 | 182 | 190 | 188 | 204 | 209 |
| EBITDA | 4,336 | 4,522 | 4,405 | 4,694 | 5,020 | 5,145 |
| (−) Tax | 747 | 777 | 755 | 807 | 863 | — |
| (−) CapEx | 205 | 214 | 208 | 222 | 237 | — |
| (−) ΔWC | 9,555 | 628 | -456 | 1,063 | 1,136 | — |
| Free Cash Flow (FCF) | -6,171 | 2,902 | 3,898 | 2,602 | 2,784 | — |
| Peers' EBITDA Multiple | 6.7x | |||||
| Terminal Value | 34,421 | |||||
| WACC / Discount Rate | 7.73% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -5,946 | 2,596 | 3,236 | 2,005 | 1,991 | 23,723 |
| Enterprise Value | 27,606 | |||||
| Projection Period | 3,883 | 14.1% | ||||
| Terminal Value | 23,723 | 85.9% | ||||
| (−) Current Net Debt | 4,238 | |||||
| Equity Value | 23,368 | |||||
| (÷) Outstanding Shares | 287M | |||||
| Fair Price | $82 | -39.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 2.7x | 4.7x | 6.7x | 8.7x | 10.7x |
|---|---|---|---|---|---|
| 5.7% | $37 | $64 | $91 | $119 | $146 |
| 6.7% | $35 | $60 | $86 | $112 | $138 |
| 7.7% | $32 | $57 | $82 | $106 | $131 |
| 8.7% | $30 | $53 | $77 | $101 | $124 |
| 9.7% | $28 | $50 | $73 | $95 | $118 |
Current price: $134.85. 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.