Using an unlevered Free Cash Flow to Firm (FCFF) model, we project NiSource Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.3% to 5.3% 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 68, DPO 111, DIO 63). At a 5.8% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $136.01 per share, suggesting NI is undervalued by 198.8% at the current price of $45.52.
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 | 2,251 | 2,379 | 2,570 | 2,847 | 2,997 | 3,072 |
| (−) Net Interest | 548 | 579 | 625 | 693 | 729 | 747 |
| (+) D&A | 2,422 | 2,624 | 2,784 | 2,904 | 3,095 | 3,173 |
| EBITDA | 5,221 | 5,581 | 5,979 | 6,443 | 6,821 | 6,992 |
| (−) Tax | 376 | 397 | 429 | 476 | 501 | — |
| (−) CapEx | 2,844 | 3,005 | 3,247 | 3,597 | 3,787 | — |
| (−) ΔWC | 314 | 44 | 66 | 96 | 52 | — |
| Free Cash Flow (FCF) | 1,687 | 2,134 | 2,237 | 2,275 | 2,482 | — |
| Peers' EBITDA Multiple | 13.5x | |||||
| Terminal Value | 94,532 | |||||
| WACC / Discount Rate | 5.80% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,640 | 1,961 | 1,942 | 1,868 | 1,925 | 71,301 |
| Enterprise Value | 80,637 | |||||
| Projection Period | 9,336 | 11.6% | ||||
| Terminal Value | 71,301 | 88.4% | ||||
| (−) Current Net Debt | 16,105 | |||||
| Equity Value | 64,532 | |||||
| (÷) Outstanding Shares | 475M | |||||
| Fair Price | $136 | +198.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.5x | 11.5x | 13.5x | 15.5x | 17.5x |
|---|---|---|---|---|---|
| 3.8% | $103 | $128 | $152 | $176 | $201 |
| 4.8% | $97 | $120 | $144 | $167 | $190 |
| 5.8% | $92 | $114 | $136 | $158 | $180 |
| 6.8% | $86 | $107 | $129 | $150 | $171 |
| 7.8% | $81 | $101 | $122 | $142 | $162 |
Current price: $45.52. 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.