Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Public Storage's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.5% to 6.1% 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 11, DPO 30, DIO 60). At a 7.3% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 20.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $403.55 per share, suggesting PSA is undervalued by 49.8% at the current price of $269.43.
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 | 2,864 | 3,017 | 3,141 | 3,532 | 3,747 | 3,840 |
| (−) Net Interest | 228 | 240 | 250 | 281 | 298 | 305 |
| (+) D&A | 380 | 414 | 415 | 419 | 443 | 454 |
| EBITDA | 3,472 | 3,670 | 3,806 | 4,232 | 4,488 | 4,600 |
| (−) Tax | 7 | 8 | 8 | 9 | 10 | — |
| (−) CapEx | 440 | 463 | 482 | 542 | 575 | — |
| (−) ΔWC | 155 | 16 | 13 | 41 | 22 | — |
| Free Cash Flow (FCF) | 2,870 | 3,184 | 3,302 | 3,640 | 3,881 | — |
| Peers' EBITDA Multiple | 20.6x | |||||
| Terminal Value | 94,939 | |||||
| WACC / Discount Rate | 7.27% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,771 | 2,866 | 2,771 | 2,847 | 2,830 | 66,842 |
| Enterprise Value | 80,926 | |||||
| Projection Period | 14,084 | 17.4% | ||||
| Terminal Value | 66,842 | 82.6% | ||||
| (−) Current Net Debt | 9,936 | |||||
| Equity Value | 70,990 | |||||
| (÷) Outstanding Shares | 176M | |||||
| Fair Price | $404 | +49.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 16.6x | 18.6x | 20.6x | 22.6x | 24.6x |
|---|---|---|---|---|---|
| 5.3% | $364 | $404 | $445 | $485 | $526 |
| 6.3% | $347 | $385 | $424 | $462 | $501 |
| 7.3% | $330 | $367 | $404 | $440 | $477 |
| 8.3% | $314 | $349 | $384 | $420 | $455 |
| 9.3% | $299 | $333 | $366 | $400 | $434 |
Current price: $269.43. 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.