Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Rockwell Automation, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 6.2% to 10.4% 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 81, DPO 77, DIO 92). At a 8.7% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $194.81 per share, suggesting ROK is overvalued by 45.5% at the current price of $357.23.
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 | 1,048 | 1,111 | 1,181 | 1,249 | 1,379 | 1,413 |
| (−) Net Interest | 142 | 150 | 160 | 169 | 187 | 191 |
| (+) D&A | 167 | 179 | 189 | 198 | 196 | 201 |
| EBITDA | 1,357 | 1,440 | 1,530 | 1,616 | 1,762 | 1,806 |
| (−) Tax | 166 | 175 | 187 | 197 | 218 | — |
| (−) CapEx | 182 | 193 | 205 | 217 | 239 | — |
| (−) ΔWC | -74 | 129 | 146 | 140 | 270 | — |
| Free Cash Flow (FCF) | 1,083 | 943 | 993 | 1,062 | 1,035 | — |
| Peers' EBITDA Multiple | 17.6x | |||||
| Terminal Value | 31,862 | |||||
| WACC / Discount Rate | 8.67% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,039 | 832 | 806 | 794 | 712 | 21,027 |
| Enterprise Value | 25,211 | |||||
| Projection Period | 4,184 | 16.6% | ||||
| Terminal Value | 21,027 | 83.4% | ||||
| (−) Current Net Debt | 3,179 | |||||
| Equity Value | 22,032 | |||||
| (÷) Outstanding Shares | 113M | |||||
| Fair Price | $195 | -45.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.6x | 15.6x | 17.6x | 19.6x | 21.6x |
|---|---|---|---|---|---|
| 6.7% | $168 | $191 | $215 | $238 | $261 |
| 7.7% | $160 | $182 | $204 | $226 | $249 |
| 8.7% | $153 | $174 | $195 | $216 | $237 |
| 9.7% | $145 | $166 | $186 | $206 | $226 |
| 10.7% | $139 | $158 | $177 | $196 | $216 |
Current price: $357.23. 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.