Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Raymond James Financial, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -2.0% to 12.9% 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 126, DPO 11408, DIO 60). At a 8.8% WACC with mid-year discounting, the terminal value (49% 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 $653.57 per share, suggesting RJF is undervalued by 349.6% at the current price of $145.35.
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 | 3,902 | 4,207 | 4,517 | 4,875 | 5,505 | 5,643 |
| (−) Net Interest | 1,273 | 1,373 | 1,474 | 1,590 | 1,796 | 1,841 |
| (+) D&A | 146 | 166 | 184 | 189 | 191 | 196 |
| EBITDA | 5,322 | 5,746 | 6,175 | 6,654 | 7,493 | 7,680 |
| (−) Tax | 889 | 958 | 1,029 | 1,110 | 1,254 | — |
| (−) CapEx | 171 | 185 | 198 | 214 | 242 | — |
| (−) ΔWC | -35,054 | -2,835 | -2,881 | -3,322 | -5,863 | — |
| Free Cash Flow (FCF) | 39,316 | 7,438 | 7,829 | 8,653 | 11,861 | — |
| Peers' EBITDA Multiple | 12.5x | |||||
| Terminal Value | 95,772 | |||||
| WACC / Discount Rate | 8.75% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 37,701 | 6,559 | 6,348 | 6,451 | 8,132 | 62,966 |
| Enterprise Value | 128,158 | |||||
| Projection Period | 65,192 | 50.9% | ||||
| Terminal Value | 62,966 | 49.1% | ||||
| (−) Current Net Debt | (6,844) | |||||
| Equity Value | 135,002 | |||||
| (÷) Outstanding Shares | 207M | |||||
| Fair Price | $653 | +349.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.5x | 10.5x | 12.5x | 14.5x | 16.5x |
|---|---|---|---|---|---|
| 6.7% | $586 | $639 | $693 | $746 | $800 |
| 7.7% | $570 | $621 | $673 | $724 | $775 |
| 8.7% | $556 | $605 | $654 | $702 | $751 |
| 9.7% | $542 | $589 | $635 | $682 | $729 |
| 10.7% | $529 | $573 | $618 | $663 | $707 |
Current price: $145.35. 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.