Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Pfizer Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.2% to 0.3% 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 75, DPO 81, DIO 140). At a 6.9% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $30.15 per share, suggesting PFE is fairly valued by 9.4% at the current price of $27.57.
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 | 13,693 | 13,175 | 12,259 | 11,572 | 11,602 | 11,892 |
| (−) Net Interest | 1,917 | 1,844 | 1,716 | 1,620 | 1,624 | 1,665 |
| (+) D&A | 3,078 | 3,072 | 2,941 | 2,639 | 2,511 | 2,573 |
| EBITDA | 18,688 | 18,091 | 16,916 | 15,831 | 15,737 | 16,130 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 2,680 | 2,579 | 2,400 | 2,265 | 2,271 | — |
| (−) ΔWC | -882 | -621 | -1,097 | -823 | 36 | — |
| Free Cash Flow (FCF) | 16,890 | 16,133 | 15,613 | 14,389 | 13,429 | — |
| Peers' EBITDA Multiple | 14.9x | |||||
| Terminal Value | 240,178 | |||||
| WACC / Discount Rate | 6.88% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 16,338 | 14,602 | 13,222 | 11,401 | 9,957 | 172,244 |
| Enterprise Value | 237,763 | |||||
| Projection Period | 65,520 | 27.6% | ||||
| Terminal Value | 172,244 | 72.4% | ||||
| (−) Current Net Debt | 66,274 | |||||
| Equity Value | 171,489 | |||||
| (÷) Outstanding Shares | 5686M | |||||
| Fair Price | $30 | +9.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.9x | 12.9x | 14.9x | 16.9x | 18.9x |
|---|---|---|---|---|---|
| 4.9% | $25 | $29 | $34 | $38 | $43 |
| 5.9% | $23 | $28 | $32 | $36 | $40 |
| 6.9% | $22 | $26 | $30 | $34 | $38 |
| 7.9% | $21 | $25 | $29 | $32 | $36 |
| 8.9% | $20 | $23 | $27 | $31 | $34 |
Current price: $27.57. 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.