Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Constellation Brands, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -11.1% to 2.6% 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 42, DPO 68, DIO 131). At a 5.8% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $190.72 per share, suggesting STZ is undervalued by 26.3% at the current price of $150.98.
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 | 2,607 | 2,618 | 2,680 | 2,785 | 2,858 | 2,930 |
| (−) Net Interest | 382 | 383 | 392 | 408 | 419 | 429 |
| (+) D&A | 1,082 | 1,117 | 1,120 | 1,127 | 1,095 | 1,123 |
| EBITDA | 4,070 | 4,118 | 4,193 | 4,320 | 4,372 | 4,482 |
| (−) Tax | 1,303 | 1,309 | 1,340 | 1,393 | 1,429 | — |
| (−) CapEx | 1,039 | 1,044 | 1,069 | 1,111 | 1,140 | — |
| (−) ΔWC | 321 | 8 | 43 | 73 | 51 | — |
| Free Cash Flow (FCF) | 1,407 | 1,758 | 1,741 | 1,744 | 1,752 | — |
| Peers' EBITDA Multiple | 11.7x | |||||
| Terminal Value | 52,300 | |||||
| WACC / Discount Rate | 5.84% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,367 | 1,614 | 1,510 | 1,429 | 1,357 | 39,370 |
| Enterprise Value | 46,648 | |||||
| Projection Period | 7,278 | 15.6% | ||||
| Terminal Value | 39,370 | 84.4% | ||||
| (−) Current Net Debt | 12,045 | |||||
| Equity Value | 34,603 | |||||
| (÷) Outstanding Shares | 181M | |||||
| Fair Price | $191 | +26.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.7x | 9.7x | 11.7x | 13.7x | 15.7x |
|---|---|---|---|---|---|
| 3.8% | $133 | $173 | $214 | $255 | $296 |
| 4.8% | $124 | $163 | $202 | $241 | $280 |
| 5.8% | $116 | $154 | $191 | $228 | $265 |
| 6.8% | $109 | $144 | $180 | $215 | $251 |
| 7.8% | $102 | $136 | $170 | $203 | $237 |
Current price: $150.98. 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.