Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Simon Property Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -0.6% to 13.8% 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 88, DPO 613, DIO 60). At a 7.0% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $268.33 per share, suggesting SPG is undervalued by 47.6% at the current price of $181.75.
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 | 4,058 | 4,230 | 4,388 | 4,713 | 5,362 | 5,496 |
| (−) Net Interest | 956 | 997 | 1,034 | 1,111 | 1,264 | 1,295 |
| (+) D&A | 728 | 783 | 821 | 837 | 873 | 895 |
| EBITDA | 5,742 | 6,010 | 6,243 | 6,660 | 7,499 | 7,686 |
| (−) Tax | 110 | 115 | 119 | 128 | 146 | — |
| (−) CapEx | 805 | 840 | 871 | 935 | 1,064 | — |
| (−) ΔWC | 861 | -7 | -6 | -13 | -25 | — |
| Free Cash Flow (FCF) | 3,965 | 5,062 | 5,259 | 5,609 | 6,314 | — |
| Peers' EBITDA Multiple | 17.2x | |||||
| Terminal Value | 132,048 | |||||
| WACC / Discount Rate | 7.04% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,832 | 4,571 | 4,436 | 4,420 | 4,648 | 93,955 |
| Enterprise Value | 115,862 | |||||
| Projection Period | 21,907 | 18.9% | ||||
| Terminal Value | 93,955 | 81.1% | ||||
| (−) Current Net Debt | 28,364 | |||||
| Equity Value | 87,498 | |||||
| (÷) Outstanding Shares | 326M | |||||
| Fair Price | $268 | +47.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.2x | 15.2x | 17.2x | 19.2x | 21.2x |
|---|---|---|---|---|---|
| 5.0% | $226 | $263 | $300 | $337 | $374 |
| 6.0% | $213 | $249 | $284 | $319 | $354 |
| 7.0% | $201 | $235 | $268 | $302 | $335 |
| 8.0% | $190 | $222 | $254 | $286 | $318 |
| 9.0% | $179 | $209 | $240 | $270 | $301 |
Current price: $181.75. 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.