Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Stanley Black & Decker, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.6% to 3.8% 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 28, DPO 84, DIO 161). At a 9.4% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 22.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $165.89 per share, suggesting SWK is undervalued by 134.5% at the current price of $70.75.
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 | 875 | 876 | 895 | 933 | 969 | 993 |
| (−) Net Interest | 398 | 398 | 407 | 424 | 440 | 451 |
| (+) D&A | 405 | 379 | 352 | 364 | 376 | 386 |
| EBITDA | 1,678 | 1,654 | 1,653 | 1,721 | 1,786 | 1,831 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 391 | 391 | 400 | 417 | 433 | — |
| (−) ΔWC | 545 | 3 | 74 | 152 | 141 | — |
| Free Cash Flow (FCF) | 743 | 1,260 | 1,180 | 1,152 | 1,212 | — |
| Peers' EBITDA Multiple | 22.6x | |||||
| Terminal Value | 41,461 | |||||
| WACC / Discount Rate | 9.43% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 710 | 1,100 | 942 | 841 | 808 | 26,424 |
| Enterprise Value | 30,824 | |||||
| Projection Period | 4,401 | 14.3% | ||||
| Terminal Value | 26,424 | 85.7% | ||||
| (−) Current Net Debt | 5,584 | |||||
| Equity Value | 25,241 | |||||
| (÷) Outstanding Shares | 152M | |||||
| Fair Price | $166 | +134.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 18.6x | 20.6x | 22.6x | 24.6x | 26.6x |
|---|---|---|---|---|---|
| 7.4% | $150 | $167 | $184 | $201 | $218 |
| 8.4% | $143 | $159 | $175 | $191 | $207 |
| 9.4% | $135 | $151 | $166 | $181 | $197 |
| 10.4% | $128 | $143 | $158 | $172 | $187 |
| 11.4% | $122 | $136 | $150 | $164 | $178 |
Current price: $70.75. 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.