Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The PNC Financial Services Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -17.9% to 12.3% 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 833, DPO 18115, DIO 60). At a 10.5% WACC with mid-year discounting, the terminal value (36% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $753.10 per share, suggesting PNC is undervalued by 264.8% at the current price of $206.45.
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 | 6,147 | 6,438 | 6,723 | 7,551 | 8,480 | 8,693 |
| (−) Net Interest | 6,091 | 6,380 | 6,662 | 7,483 | 8,404 | 8,614 |
| (+) D&A | 0 | 257 | 527 | 808 | 1,124 | 1,153 |
| EBITDA | 12,238 | 13,075 | 13,912 | 15,842 | 18,009 | 18,459 |
| (−) Tax | 1,079 | 1,130 | 1,180 | 1,326 | 1,489 | — |
| (−) CapEx | 1,287 | 1,348 | 1,407 | 1,581 | 1,775 | — |
| (−) ΔWC | -119,534 | -11,066 | -10,819 | -31,422 | -35,291 | — |
| Free Cash Flow (FCF) | 129,405 | 21,664 | 22,144 | 44,357 | 50,035 | — |
| Peers' EBITDA Multiple | 11.1x | |||||
| Terminal Value | 205,448 | |||||
| WACC / Discount Rate | 10.48% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 123,112 | 18,654 | 17,258 | 31,290 | 31,946 | 124,794 |
| Enterprise Value | 347,055 | |||||
| Projection Period | 222,261 | 64.0% | ||||
| Terminal Value | 124,794 | 36.0% | ||||
| (−) Current Net Debt | 50,324 | |||||
| Equity Value | 296,731 | |||||
| (÷) Outstanding Shares | 394M | |||||
| Fair Price | $753 | +264.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.1x | 9.1x | 11.1x | 13.1x | 15.1x |
|---|---|---|---|---|---|
| 8.5% | $677 | $739 | $802 | $864 | $927 |
| 9.5% | $658 | $717 | $777 | $836 | $896 |
| 10.5% | $639 | $696 | $753 | $810 | $867 |
| 11.5% | $622 | $676 | $730 | $785 | $839 |
| 12.5% | $605 | $657 | $709 | $761 | $813 |
Current price: $206.45. 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.