Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Coca-Cola Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.4% to 6.1% 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 28, DPO 146, DIO 87). At a 6.5% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $55.95 per share, suggesting KO is overvalued by 25.4% at the current price of $75.05.
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 | 13,003 | 13,205 | 13,903 | 14,405 | 15,289 | 15,671 |
| (−) Net Interest | 1,619 | 1,644 | 1,731 | 1,793 | 1,903 | 1,951 |
| (+) D&A | 1,776 | 1,892 | 1,990 | 2,036 | 2,055 | 2,106 |
| EBITDA | 16,397 | 16,741 | 17,624 | 18,235 | 19,247 | 19,728 |
| (−) Tax | 2,420 | 2,458 | 2,588 | 2,681 | 2,846 | — |
| (−) CapEx | 1,946 | 1,977 | 2,081 | 2,156 | 2,289 | — |
| (−) ΔWC | 7,952 | 9 | 32 | 23 | 41 | — |
| Free Cash Flow (FCF) | 4,079 | 12,297 | 12,923 | 13,374 | 14,072 | — |
| Peers' EBITDA Multiple | 15.9x | |||||
| Terminal Value | 314,462 | |||||
| WACC / Discount Rate | 6.55% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,952 | 11,181 | 11,028 | 10,712 | 10,578 | 229,017 |
| Enterprise Value | 276,468 | |||||
| Projection Period | 47,451 | 17.2% | ||||
| Terminal Value | 229,017 | 82.8% | ||||
| (−) Current Net Debt | 35,222 | |||||
| Equity Value | 241,246 | |||||
| (÷) Outstanding Shares | 4313M | |||||
| Fair Price | $56 | -25.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 11.9x | 13.9x | 15.9x | 17.9x | 19.9x |
|---|---|---|---|---|---|
| 4.5% | $47 | $55 | $62 | $69 | $76 |
| 5.5% | $45 | $52 | $59 | $66 | $73 |
| 6.5% | $43 | $49 | $56 | $63 | $69 |
| 7.5% | $41 | $47 | $53 | $60 | $66 |
| 8.5% | $39 | $45 | $51 | $57 | $63 |
Current price: $75.05. 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.