Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Public Service Enterprise Group Incorporated's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.0% to 3.9% 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 74, DPO 82, DIO 64). At a 6.1% WACC with mid-year discounting, the terminal value (81% 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 $164.05 per share, suggesting PEG is undervalued by 103.1% at the current price of $80.77.
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 | 4,274 | 4,481 | 4,670 | 4,774 | 4,959 | 5,083 |
| (−) Net Interest | 814 | 853 | 889 | 909 | 945 | 968 |
| (+) D&A | 2,871 | 2,992 | 3,112 | 3,174 | 3,241 | 3,322 |
| EBITDA | 7,959 | 8,327 | 8,672 | 8,858 | 9,145 | 9,374 |
| (−) Tax | 298 | 313 | 326 | 333 | 346 | — |
| (−) CapEx | 3,326 | 3,487 | 3,635 | 3,716 | 3,860 | — |
| (−) ΔWC | -229 | 102 | 93 | 52 | 91 | — |
| Free Cash Flow (FCF) | 4,564 | 4,424 | 4,618 | 4,758 | 4,848 | — |
| Peers' EBITDA Multiple | 12.4x | |||||
| Terminal Value | 116,235 | |||||
| WACC / Discount Rate | 6.12% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,430 | 4,048 | 3,981 | 3,865 | 3,712 | 86,386 |
| Enterprise Value | 106,421 | |||||
| Projection Period | 20,036 | 18.8% | ||||
| Terminal Value | 86,386 | 81.2% | ||||
| (−) Current Net Debt | 24,237 | |||||
| Equity Value | 82,184 | |||||
| (÷) Outstanding Shares | 501M | |||||
| Fair Price | $164 | +103.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.4x | 10.4x | 12.4x | 14.4x | 16.4x |
|---|---|---|---|---|---|
| 4.1% | $122 | $153 | $183 | $214 | $244 |
| 5.1% | $115 | $144 | $173 | $202 | $232 |
| 6.1% | $108 | $136 | $164 | $192 | $220 |
| 7.1% | $102 | $129 | $155 | $182 | $208 |
| 8.1% | $96 | $122 | $147 | $172 | $198 |
Current price: $80.77. 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.