Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Pentair plc's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.2% to 2.6% 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 56, DPO 46, DIO 93). At a 8.6% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $93.20 per share, suggesting PNR is fairly valued by 7.9% at the current price of $86.35.
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 | 718 | 752 | 785 | 806 | 828 | 848 |
| (−) Net Interest | 74 | 77 | 81 | 83 | 85 | 87 |
| (+) D&A | 73 | 76 | 76 | 77 | 80 | 82 |
| EBITDA | 865 | 906 | 941 | 967 | 992 | 1,017 |
| (−) Tax | 72 | 75 | 79 | 81 | 83 | — |
| (−) CapEx | 77 | 81 | 85 | 87 | 89 | — |
| (−) ΔWC | 7 | 48 | 46 | 30 | 30 | — |
| Free Cash Flow (FCF) | 709 | 701 | 732 | 768 | 791 | — |
| Peers' EBITDA Multiple | 20.7x | |||||
| Terminal Value | 21,097 | |||||
| WACC / Discount Rate | 8.63% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 680 | 619 | 595 | 575 | 545 | 13,944 |
| Enterprise Value | 16,958 | |||||
| Projection Period | 3,014 | 17.8% | ||||
| Terminal Value | 13,944 | 82.2% | ||||
| (−) Current Net Debt | 1,537 | |||||
| Equity Value | 15,421 | |||||
| (÷) Outstanding Shares | 166M | |||||
| Fair Price | $93 | +7.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.7x | 18.7x | 20.7x | 22.7x | 24.7x |
|---|---|---|---|---|---|
| 6.6% | $84 | $93 | $102 | $111 | $120 |
| 7.6% | $81 | $89 | $98 | $106 | $115 |
| 8.6% | $77 | $85 | $93 | $101 | $109 |
| 9.6% | $74 | $81 | $89 | $97 | $105 |
| 10.6% | $70 | $78 | $85 | $92 | $100 |
Current price: $86.35. 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.