Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Marsh & McLennan Companies, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.9% to 8.0% 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 104, DPO 94, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $327.42 per share, suggesting MRSH is undervalued by 87.4% at the current price of $174.69.
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 | 9,795 | 10,306 | 10,887 | 11,759 | 12,702 | 13,020 |
| (−) Net Interest | 762 | 802 | 847 | 915 | 988 | 1,013 |
| (+) D&A | 380 | 395 | 402 | 426 | 479 | 491 |
| EBITDA | 10,937 | 11,503 | 12,136 | 13,101 | 14,169 | 14,524 |
| (−) Tax | 2,385 | 2,509 | 2,651 | 2,863 | 3,093 | — |
| (−) CapEx | 482 | 507 | 536 | 579 | 625 | — |
| (−) ΔWC | 2,525 | 341 | 388 | 583 | 630 | — |
| Free Cash Flow (FCF) | 5,546 | 8,145 | 8,562 | 9,076 | 9,822 | — |
| Peers' EBITDA Multiple | 14.3x | |||||
| Terminal Value | 207,541 | |||||
| WACC / Discount Rate | 7.41% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,351 | 7,318 | 7,162 | 7,068 | 7,122 | 145,201 |
| Enterprise Value | 179,221 | |||||
| Projection Period | 34,020 | 19.0% | ||||
| Terminal Value | 145,201 | 81.0% | ||||
| (−) Current Net Debt | 18,762 | |||||
| Equity Value | 160,459 | |||||
| (÷) Outstanding Shares | 490M | |||||
| Fair Price | $327 | +87.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.3x | 12.3x | 14.3x | 16.3x | 18.3x |
|---|---|---|---|---|---|
| 5.4% | $269 | $315 | $360 | $406 | $451 |
| 6.4% | $256 | $300 | $343 | $387 | $430 |
| 7.4% | $244 | $286 | $327 | $369 | $410 |
| 8.4% | $233 | $273 | $312 | $352 | $392 |
| 9.4% | $222 | $260 | $298 | $336 | $374 |
Current price: $174.69. 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.