Using an unlevered Free Cash Flow to Firm (FCFF) model, we project JPMorgan Chase & Co.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -30.3% to 21.8% 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 267, DPO 1092, DIO 60). At a 10.1% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $725.08 per share, suggesting JPM is undervalued by 147.9% at the current price of $292.52.
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 | 41,980 | 43,886 | 46,193 | 56,249 | 68,494 | 70,207 |
| (−) Net Interest | 49,978 | 52,247 | 54,994 | 66,966 | 81,544 | 83,582 |
| (+) D&A | 0 | 1,950 | 3,988 | 6,133 | 8,746 | 8,964 |
| EBITDA | 91,957 | 98,083 | 105,176 | 129,348 | 158,783 | 162,753 |
| (−) Tax | 8,426 | 8,808 | 9,271 | 11,290 | 13,747 | — |
| (−) CapEx | 9,748 | 10,191 | 10,727 | 13,062 | 15,905 | — |
| (−) ΔWC | -121,120 | -432 | -523 | -2,281 | -2,777 | — |
| Free Cash Flow (FCF) | 194,904 | 79,516 | 85,701 | 107,278 | 131,908 | — |
| Peers' EBITDA Multiple | 16.9x | |||||
| Terminal Value | 2,748,899 | |||||
| WACC / Discount Rate | 10.11% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 185,739 | 68,819 | 67,360 | 76,576 | 85,511 | 1,698,222 |
| Enterprise Value | 2,182,228 | |||||
| Projection Period | 484,006 | 22.2% | ||||
| Terminal Value | 1,698,222 | 77.8% | ||||
| (−) Current Net Debt | 156,644 | |||||
| Equity Value | 2,025,584 | |||||
| (÷) Outstanding Shares | 2794M | |||||
| Fair Price | $725 | +147.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.9x | 14.9x | 16.9x | 18.9x | 20.9x |
|---|---|---|---|---|---|
| 8.1% | $633 | $711 | $790 | $869 | $948 |
| 9.1% | $606 | $681 | $757 | $832 | $908 |
| 10.1% | $581 | $653 | $725 | $797 | $869 |
| 11.1% | $557 | $626 | $695 | $764 | $833 |
| 12.1% | $535 | $601 | $666 | $732 | $798 |
Current price: $292.52. 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.