Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Loews Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 20.5% to 7.3% 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 230, DPO 4, DIO 60). At a 7.2% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $437.93 per share, suggesting L is undervalued by 308.9% at the current price of $107.11.
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 | 7,886 | 8,459 | 9,074 | 9,734 | 10,442 | 10,703 |
| (−) Net Interest | 576 | 617 | 662 | 711 | 762 | 781 |
| (+) D&A | 608 | 682 | 732 | 791 | 875 | 897 |
| EBITDA | 9,069 | 9,758 | 10,469 | 11,236 | 12,079 | 12,381 |
| (−) Tax | 1,692 | 1,815 | 1,947 | 2,088 | 2,240 | — |
| (−) CapEx | 851 | 913 | 980 | 1,051 | 1,127 | — |
| (−) ΔWC | 4,769 | 1,141 | 1,224 | 1,313 | 1,409 | — |
| Free Cash Flow (FCF) | 1,757 | 5,889 | 6,318 | 6,783 | 7,303 | — |
| Peers' EBITDA Multiple | 8.8x | |||||
| Terminal Value | 109,570 | |||||
| WACC / Discount Rate | 7.16% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,697 | 5,309 | 5,315 | 5,325 | 5,349 | 77,530 |
| Enterprise Value | 100,525 | |||||
| Projection Period | 22,995 | 22.9% | ||||
| Terminal Value | 77,530 | 77.1% | ||||
| (−) Current Net Debt | 8,994 | |||||
| Equity Value | 91,531 | |||||
| (÷) Outstanding Shares | 209M | |||||
| Fair Price | $438 | +308.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.9x | 6.9x | 8.9x | 10.9x | 12.9x |
|---|---|---|---|---|---|
| 5.2% | $296 | $389 | $481 | $573 | $665 |
| 6.2% | $283 | $371 | $459 | $546 | $634 |
| 7.2% | $270 | $354 | $438 | $522 | $606 |
| 8.2% | $258 | $338 | $418 | $498 | $578 |
| 9.2% | $247 | $323 | $400 | $476 | $552 |
Current price: $107.11. 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.