Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NextEra Energy, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 14.1% to 4.2% 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 81, DPO 283, DIO 75). At a 6.2% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $137.16 per share, suggesting NEE is undervalued by 50.9% at the current price of $90.89.
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 | 13,328 | 14,489 | 15,500 | 16,293 | 16,976 | 17,400 |
| (−) Net Interest | 2,992 | 3,253 | 3,479 | 3,658 | 3,811 | 3,906 |
| (+) D&A | 8,982 | 9,854 | 10,556 | 11,482 | 12,760 | 13,079 |
| EBITDA | 25,302 | 27,595 | 29,535 | 31,432 | 33,546 | 34,385 |
| (−) Tax | 745 | 810 | 867 | 911 | 949 | — |
| (−) CapEx | 12,191 | 13,253 | 14,177 | 14,903 | 15,527 | — |
| (−) ΔWC | -1,301 | -62 | -54 | -42 | -37 | — |
| Free Cash Flow (FCF) | 13,666 | 13,594 | 14,545 | 15,661 | 17,106 | — |
| Peers' EBITDA Multiple | 12.4x | |||||
| Terminal Value | 426,372 | |||||
| WACC / Discount Rate | 6.21% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 13,260 | 12,419 | 12,510 | 12,681 | 13,041 | 315,407 |
| Enterprise Value | 379,319 | |||||
| Projection Period | 63,912 | 16.8% | ||||
| Terminal Value | 315,407 | 83.2% | ||||
| (−) Current Net Debt | 92,807 | |||||
| Equity Value | 286,512 | |||||
| (÷) Outstanding Shares | 2089M | |||||
| Fair Price | $137 | +50.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.4x | 10.4x | 12.4x | 14.4x | 16.4x |
|---|---|---|---|---|---|
| 4.2% | $100 | $127 | $154 | $180 | $207 |
| 5.2% | $94 | $120 | $145 | $171 | $196 |
| 6.2% | $88 | $113 | $137 | $162 | $186 |
| 7.2% | $83 | $106 | $130 | $153 | $176 |
| 8.2% | $78 | $100 | $122 | $145 | $167 |
Current price: $90.89. 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.