Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Sempra's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.0% to 1.4% 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 68, DPO 67, DIO 17). At a 5.9% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $144.37 per share, suggesting SRE is undervalued by 51.1% at the current price of $95.53.
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 | 1,881 | 1,788 | 1,843 | 1,759 | 1,784 | 1,828 |
| (−) Net Interest | 1,286 | 1,223 | 1,260 | 1,202 | 1,220 | 1,250 |
| (+) D&A | 7,519 | 8,038 | 8,414 | 8,226 | 8,006 | 8,207 |
| EBITDA | 10,686 | 11,049 | 11,518 | 11,187 | 11,010 | 11,285 |
| (−) Tax | 260 | 247 | 254 | 243 | 246 | — |
| (−) CapEx | 7,610 | 7,235 | 7,459 | 7,116 | 7,217 | — |
| (−) ΔWC | 135 | -61 | 36 | -55 | 16 | — |
| Free Cash Flow (FCF) | 2,682 | 3,628 | 3,768 | 3,884 | 3,530 | — |
| Peers' EBITDA Multiple | 13.6x | |||||
| Terminal Value | 153,699 | |||||
| WACC / Discount Rate | 5.89% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,606 | 3,329 | 3,265 | 3,179 | 2,728 | 115,439 |
| Enterprise Value | 130,546 | |||||
| Projection Period | 15,107 | 11.6% | ||||
| Terminal Value | 115,439 | 88.4% | ||||
| (−) Current Net Debt | 36,285 | |||||
| Equity Value | 94,261 | |||||
| (÷) Outstanding Shares | 653M | |||||
| Fair Price | $144 | +51.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.6x | 11.6x | 13.6x | 15.6x | 17.6x |
|---|---|---|---|---|---|
| 3.9% | $106 | $135 | $163 | $192 | $220 |
| 4.9% | $99 | $126 | $154 | $181 | $208 |
| 5.9% | $92 | $118 | $144 | $170 | $196 |
| 6.9% | $86 | $111 | $136 | $160 | $185 |
| 7.9% | $80 | $104 | $128 | $151 | $175 |
Current price: $95.53. 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.