Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Invesco Ltd.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -17.3% to -1.9% 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 59, DPO 4, DIO 60). At a 5.2% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $20.65 per share, suggesting IVZ is fairly valued by 14.7% at the current price of $24.21.
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 | 1,442 | 1,532 | 1,622 | 1,725 | 1,692 | 1,734 |
| (−) Net Interest | 66 | 70 | 74 | 79 | 78 | 80 |
| (+) D&A | 124 | 123 | 108 | 99 | 110 | 113 |
| EBITDA | 1,632 | 1,726 | 1,804 | 1,903 | 1,880 | 1,927 |
| (−) Tax | 347 | 369 | 391 | 415 | 407 | — |
| (−) CapEx | 107 | 113 | 120 | 128 | 125 | — |
| (−) ΔWC | 465 | 85 | 84 | 96 | -31 | — |
| Free Cash Flow (FCF) | 713 | 1,159 | 1,210 | 1,264 | 1,379 | — |
| Peers' EBITDA Multiple | 8.4x | |||||
| Terminal Value | 16,166 | |||||
| WACC / Discount Rate | 5.24% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 695 | 1,073 | 1,065 | 1,057 | 1,096 | 12,524 |
| Enterprise Value | 17,510 | |||||
| Projection Period | 4,986 | 28.5% | ||||
| Terminal Value | 12,524 | 71.5% | ||||
| (−) Current Net Debt | 8,145 | |||||
| Equity Value | 9,365 | |||||
| (÷) Outstanding Shares | 454M | |||||
| Fair Price | $21 | -14.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.4x | 6.4x | 8.4x | 10.4x | 12.4x |
|---|---|---|---|---|---|
| 3.2% | $10 | $17 | $24 | $31 | $38 |
| 4.2% | $8 | $15 | $22 | $29 | $36 |
| 5.2% | $7 | $14 | $21 | $27 | $34 |
| 6.2% | $7 | $13 | $19 | $25 | $32 |
| 7.2% | $6 | $12 | $18 | $24 | $30 |
Current price: $24.21. 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.