Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Regions Financial Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -17.9% to 9.8% 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 22, DPO 30, DIO 60). At a 9.0% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $77.74 per share, suggesting RF is undervalued by 203.1% at the current price of $25.64.
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 | 3,074 | 3,191 | 3,338 | 3,666 | 4,026 | 4,127 |
| (−) Net Interest | 1,105 | 1,147 | 1,200 | 1,318 | 1,448 | 1,484 |
| (+) D&A | 133 | 151 | 127 | 130 | 140 | 143 |
| EBITDA | 4,312 | 4,488 | 4,664 | 5,114 | 5,614 | 5,754 |
| (−) Tax | 645 | 670 | 701 | 769 | 845 | — |
| (−) CapEx | 162 | 168 | 176 | 193 | 212 | — |
| (−) ΔWC | 9 | 22 | 28 | 62 | 68 | — |
| Free Cash Flow (FCF) | 3,496 | 3,629 | 3,760 | 4,090 | 4,488 | — |
| Peers' EBITDA Multiple | 12.5x | |||||
| Terminal Value | 71,809 | |||||
| WACC / Discount Rate | 8.97% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,349 | 3,190 | 3,033 | 3,027 | 3,049 | 46,726 |
| Enterprise Value | 62,374 | |||||
| Projection Period | 15,648 | 25.1% | ||||
| Terminal Value | 46,726 | 74.9% | ||||
| (−) Current Net Debt | (6,023) | |||||
| Equity Value | 68,397 | |||||
| (÷) Outstanding Shares | 880M | |||||
| Fair Price | $78 | +203.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.5x | 10.5x | 12.5x | 14.5x | 16.5x |
|---|---|---|---|---|---|
| 7.0% | $65 | $74 | $84 | $93 | $102 |
| 8.0% | $63 | $72 | $81 | $90 | $98 |
| 9.0% | $61 | $69 | $78 | $86 | $95 |
| 10.0% | $59 | $67 | $75 | $83 | $91 |
| 11.0% | $57 | $65 | $72 | $80 | $88 |
Current price: $25.64. 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.