Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The J. M. Smucker Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.8% to 1.3% 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 27, DPO 87, DIO 74). At a 5.9% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $124.92 per share, suggesting SJM is undervalued by 31.5% at the current price of $94.96.
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 | 1,471 | 1,494 | 1,519 | 1,560 | 1,581 | 1,620 |
| (−) Net Interest | 239 | 242 | 247 | 253 | 256 | 263 |
| (+) D&A | 435 | 469 | 482 | 486 | 469 | 481 |
| EBITDA | 2,145 | 2,205 | 2,248 | 2,299 | 2,307 | 2,364 |
| (−) Tax | 371 | 377 | 383 | 394 | 399 | — |
| (−) CapEx | 475 | 483 | 491 | 504 | 511 | — |
| (−) ΔWC | -75 | 7 | 8 | 13 | 7 | — |
| Free Cash Flow (FCF) | 1,373 | 1,338 | 1,365 | 1,388 | 1,390 | — |
| Peers' EBITDA Multiple | 8.4x | |||||
| Terminal Value | 19,978 | |||||
| WACC / Discount Rate | 5.86% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,334 | 1,229 | 1,184 | 1,137 | 1,076 | 15,030 |
| Enterprise Value | 20,990 | |||||
| Projection Period | 5,960 | 28.4% | ||||
| Terminal Value | 15,030 | 71.6% | ||||
| (−) Current Net Debt | 7,692 | |||||
| Equity Value | 13,298 | |||||
| (÷) Outstanding Shares | 106M | |||||
| Fair Price | $125 | +31.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.4x | 6.4x | 8.4x | 10.4x | 12.4x |
|---|---|---|---|---|---|
| 3.9% | $68 | $105 | $142 | $178 | $215 |
| 4.9% | $63 | $98 | $133 | $168 | $203 |
| 5.9% | $58 | $91 | $125 | $158 | $192 |
| 6.9% | $53 | $85 | $117 | $149 | $181 |
| 7.9% | $49 | $79 | $110 | $140 | $171 |
Current price: $94.96. 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.