Using an unlevered Free Cash Flow to Firm (FCFF) model, we project State Street Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -34.9% to 17.1% 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 226, DPO 30, DIO 60). At a 10.5% WACC with mid-year discounting, the terminal value (59% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $839.36 per share, suggesting STT is undervalued by 565.4% at the current price of $126.14.
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 | 3,095 | 3,228 | 3,395 | 3,485 | 4,081 | 4,183 |
| (−) Net Interest | 3,706 | 3,865 | 4,065 | 4,173 | 4,887 | 5,009 |
| (+) D&A | 868 | 856 | 865 | 866 | 850 | 871 |
| EBITDA | 7,670 | 7,950 | 8,326 | 8,524 | 9,818 | 10,063 |
| (−) Tax | 555 | 579 | 609 | 625 | 732 | — |
| (−) CapEx | 749 | 781 | 821 | 843 | 987 | — |
| (−) ΔWC | -33,827 | 405 | 508 | 273 | 1,815 | — |
| Free Cash Flow (FCF) | 40,193 | 6,185 | 6,388 | 6,783 | 6,283 | — |
| Peers' EBITDA Multiple | 13.7x | |||||
| Terminal Value | 138,065 | |||||
| WACC / Discount Rate | 10.52% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 38,231 | 5,323 | 4,974 | 4,779 | 4,005 | 83,717 |
| Enterprise Value | 141,029 | |||||
| Projection Period | 57,312 | 40.6% | ||||
| Terminal Value | 83,717 | 59.4% | ||||
| (−) Current Net Debt | (101,558) | |||||
| Equity Value | 242,587 | |||||
| (÷) Outstanding Shares | 289M | |||||
| Fair Price | $839 | +565.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 9.7x | 11.7x | 13.7x | 15.7x | 17.7x |
|---|---|---|---|---|---|
| 8.5% | $779 | $826 | $872 | $918 | $964 |
| 9.5% | $767 | $811 | $855 | $899 | $944 |
| 10.5% | $755 | $797 | $839 | $882 | $924 |
| 11.5% | $744 | $784 | $824 | $865 | $905 |
| 12.5% | $733 | $771 | $810 | $849 | $887 |
Current price: $126.14. 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.