Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Kenvue Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.8% to 1.5% 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 121, DIO 100). At a 6.3% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $17.58 per share, suggesting KVUE is fairly valued by 0.2% at the current price of $17.55.
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 | 2,493 | 2,554 | 2,644 | 2,713 | 2,753 | 2,822 |
| (−) Net Interest | 237 | 243 | 251 | 258 | 261 | 268 |
| (+) D&A | 410 | 434 | 445 | 440 | 444 | 455 |
| EBITDA | 3,139 | 3,231 | 3,341 | 3,410 | 3,458 | 3,545 |
| (−) Tax | 640 | 656 | 679 | 697 | 707 | — |
| (−) CapEx | 418 | 429 | 444 | 455 | 462 | — |
| (−) ΔWC | 2,933 | 52 | 77 | 58 | 34 | — |
| Free Cash Flow (FCF) | -852 | 2,094 | 2,141 | 2,200 | 2,256 | — |
| Peers' EBITDA Multiple | 13.4x | |||||
| Terminal Value | 47,431 | |||||
| WACC / Discount Rate | 6.34% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -827 | 1,910 | 1,836 | 1,774 | 1,710 | 34,877 |
| Enterprise Value | 41,280 | |||||
| Projection Period | 6,403 | 15.5% | ||||
| Terminal Value | 34,877 | 84.5% | ||||
| (−) Current Net Debt | 7,462 | |||||
| Equity Value | 33,818 | |||||
| (÷) Outstanding Shares | 1924M | |||||
| Fair Price | $18 | +0.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.4x | 11.4x | 13.4x | 15.4x | 17.4x |
|---|---|---|---|---|---|
| 4.3% | $14 | $17 | $20 | $23 | $26 |
| 5.3% | $13 | $16 | $19 | $21 | $24 |
| 6.3% | $12 | $15 | $18 | $20 | $23 |
| 7.3% | $11 | $14 | $17 | $19 | $22 |
| 8.3% | $11 | $13 | $16 | $18 | $21 |
Current price: $17.55. 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.