Using an unlevered Free Cash Flow to Firm (FCFF) model, we project SL Green Realty Corp.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -32.9% to 3.4% 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 217, DPO 127, DIO 60). At a 5.0% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $3.28 per share, suggesting SLG is overvalued by 92.8% at the current price of $45.28.
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| 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | Terminal | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Profit Before Tax | 91 | 90 | 81 | 111 | 112 | 118 | 124 | 129 | 134 | 138 | 142 |
| (−) Net Interest | 115 | 114 | 103 | 142 | 143 | 150 | 157 | 164 | 170 | 176 | 181 |
| (+) D&A | 103 | 146 | 129 | 169 | 180 | 234 | 247 | 264 | 287 | 297 | 305 |
| EBITDA | 308 | 351 | 314 | 422 | 435 | 502 | 528 | 556 | 591 | 612 | 627 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| (−) CapEx | 218 | 217 | 196 | 269 | 271 | 285 | 298 | 311 | 323 | 334 | 342 |
| (−) ΔWC | -14 | -2 | -32 | 110 | 3 | 21 | 20 | 19 | 18 | 17 | 17 |
| Free Cash Flow (FCFF) | 103 | 135 | 150 | 43 | 161 | 196 | 209 | 226 | 249 | 261 | 268 |
| Terminal Value | 10,706 | ||||||||||
| WACC / Discount Rate | 5.0% | ||||||||||
| Long-term Growth Rate | 2.5% | ||||||||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5.5 | 6.5 | 7.5 | 8.5 | 9.5 | 5 |
| Present Value of FCF | 101 | 126 | 133 | 36 | 129 | 150 | 153 | 157 | 165 | 164 | 6,572 |
| Enterprise Value | 7,886 | ||||||||||
| Projection Period | 1,314 | 16.7% | |||||||||
| Terminal Value | 6,572 | 83.3% | |||||||||
| (−) Current Net Debt | 7,635 | ||||||||||
| Equity Value | 251 | ||||||||||
| (/) Outstanding Shares | 77 | ||||||||||
| Fair Price | $3.28 | ||||||||||
| WACC \ Terminal Growth Rate | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 3.0% | $93 | $180 | $440 | $0 | $0 |
| 4.0% | $13 | $36 | $76 | $155 | $391 |
| 5.0% | $0 | $0 | $3 | $25 | $61 |
| 6.0% | $0 | $0 | $0 | $0 | $0 |
| 7.0% | $0 | $0 | $0 | $0 | $0 |
Current price: $45.28. Green = undervalued, Red = overvalued.
Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.