Using an unlevered Free Cash Flow to Firm (FCFF) model, we project M&T Bank Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -18.8% to 19.3% 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 87, DPO 7350, DIO 60). At a 9.6% WACC with mid-year discounting, the terminal value (46% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $877.37 per share, suggesting MTB is undervalued by 326.4% at the current price of $205.77.
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 | 3,139 | 3,256 | 3,354 | 4,001 | 4,773 | 4,893 |
| (−) Net Interest | 1,831 | 1,899 | 1,956 | 2,334 | 2,785 | 2,854 |
| (+) D&A | 196 | 205 | 203 | 194 | 200 | 205 |
| EBITDA | 5,166 | 5,360 | 5,513 | 6,528 | 7,758 | 7,952 |
| (−) Tax | 734 | 761 | 784 | 935 | 1,116 | — |
| (−) CapEx | 196 | 203 | 209 | 250 | 298 | — |
| (−) ΔWC | -38,679 | -1,438 | -1,203 | -7,976 | -9,516 | — |
| Free Cash Flow (FCF) | 42,916 | 5,834 | 5,723 | 13,320 | 15,860 | — |
| Peers' EBITDA Multiple | 12.1x | |||||
| Terminal Value | 95,981 | |||||
| WACC / Discount Rate | 9.55% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 41,001 | 5,088 | 4,556 | 9,678 | 10,519 | 60,818 |
| Enterprise Value | 131,659 | |||||
| Projection Period | 70,841 | 53.8% | ||||
| Terminal Value | 60,818 | 46.2% | ||||
| (−) Current Net Debt | (5,709) | |||||
| Equity Value | 137,368 | |||||
| (÷) Outstanding Shares | 157M | |||||
| Fair Price | $877 | +326.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.1x | 10.1x | 12.1x | 14.1x | 16.1x |
|---|---|---|---|---|---|
| 7.6% | $788 | $859 | $929 | $1000 | $1071 |
| 8.6% | $768 | $835 | $903 | $970 | $1038 |
| 9.6% | $749 | $813 | $877 | $942 | $1006 |
| 10.6% | $730 | $792 | $853 | $915 | $976 |
| 11.6% | $713 | $771 | $830 | $889 | $948 |
Current price: $205.77. 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.