Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Johnson Controls International plc's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.5% to 5.6% 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 94, DPO 93, DIO 51). At a 8.3% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $86.24 per share, suggesting JCI is overvalued by 34.6% at the current price of $131.81.
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 | 2,340 | 2,485 | 2,626 | 2,802 | 2,960 | 3,034 |
| (−) Net Interest | 361 | 383 | 405 | 432 | 456 | 467 |
| (+) D&A | 483 | 480 | 496 | 528 | 557 | 571 |
| EBITDA | 3,183 | 3,348 | 3,527 | 3,762 | 3,973 | 4,072 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 537 | 570 | 602 | 643 | 679 | — |
| (−) ΔWC | 118 | 285 | 276 | 346 | 309 | — |
| Free Cash Flow (FCF) | 2,528 | 2,493 | 2,648 | 2,773 | 2,985 | — |
| Peers' EBITDA Multiple | 20.6x | |||||
| Terminal Value | 83,768 | |||||
| WACC / Discount Rate | 8.30% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,430 | 2,212 | 2,170 | 2,097 | 2,085 | 56,230 |
| Enterprise Value | 67,224 | |||||
| Projection Period | 10,994 | 16.4% | ||||
| Terminal Value | 56,230 | 83.6% | ||||
| (−) Current Net Debt | 10,811 | |||||
| Equity Value | 56,413 | |||||
| (÷) Outstanding Shares | 654M | |||||
| Fair Price | $86 | -34.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.6x | 18.6x | 20.6x | 22.6x | 24.6x |
|---|---|---|---|---|---|
| 6.3% | $77 | $86 | $95 | $105 | $114 |
| 7.3% | $73 | $82 | $91 | $99 | $108 |
| 8.3% | $70 | $78 | $86 | $95 | $103 |
| 9.3% | $66 | $74 | $82 | $90 | $98 |
| 10.3% | $63 | $70 | $78 | $86 | $93 |
Current price: $131.81. 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.