Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Host Hotels & Resorts, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -0.6% to 20.6% 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 16, DPO 48, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $68.04 per share, suggesting HST is undervalued by 248.4% at the current price of $19.53.
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 | 2,257 | 2,265 | 2,390 | 2,882 | 3,476 | 3,563 |
| (−) Net Interest | 254 | 255 | 269 | 325 | 392 | 402 |
| (+) D&A | 554 | 608 | 647 | 665 | 734 | 752 |
| EBITDA | 3,066 | 3,128 | 3,306 | 3,872 | 4,601 | 4,716 |
| (−) Tax | 88 | 88 | 93 | 112 | 135 | — |
| (−) CapEx | 697 | 700 | 738 | 890 | 1,074 | — |
| (−) ΔWC | 227 | 1 | 21 | 83 | 100 | — |
| Free Cash Flow (FCF) | 2,054 | 2,339 | 2,454 | 2,787 | 3,293 | — |
| Peers' EBITDA Multiple | 12.5x | |||||
| Terminal Value | 59,049 | |||||
| WACC / Discount Rate | 7.37% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,982 | 2,103 | 2,054 | 2,173 | 2,391 | 41,375 |
| Enterprise Value | 52,077 | |||||
| Projection Period | 10,703 | 20.6% | ||||
| Terminal Value | 41,375 | 79.4% | ||||
| (−) Current Net Debt | 4,872 | |||||
| Equity Value | 47,205 | |||||
| (÷) Outstanding Shares | 694M | |||||
| Fair Price | $68 | +248.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.5x | 10.5x | 12.5x | 14.5x | 16.5x |
|---|---|---|---|---|---|
| 5.4% | $54 | $64 | $75 | $85 | $96 |
| 6.4% | $51 | $61 | $71 | $81 | $91 |
| 7.4% | $49 | $59 | $68 | $78 | $87 |
| 8.4% | $47 | $56 | $65 | $74 | $83 |
| 9.4% | $45 | $53 | $62 | $71 | $79 |
Current price: $19.53. 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.