Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Truist Financial Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -29.8% to 7.2% 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 919, DPO 30, DIO 60). At a 11.3% WACC with mid-year discounting, the terminal value (22% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $254.71 per share, suggesting TFC is undervalued by 465.9% at the current price of $45.01.
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 | 3,571 | 3,724 | 3,842 | 4,118 | 4,414 | 4,524 |
| (−) Net Interest | 5,358 | 5,587 | 5,765 | 6,179 | 6,623 | 6,789 |
| (+) D&A | 201 | 208 | 194 | 296 | 406 | 416 |
| EBITDA | 9,131 | 9,519 | 9,801 | 10,594 | 11,443 | 11,729 |
| (−) Tax | 639 | 666 | 687 | 737 | 790 | — |
| (−) CapEx | 475 | 495 | 511 | 548 | 587 | — |
| (−) ΔWC | -271,141 | 2,320 | 1,803 | 4,196 | 4,498 | — |
| Free Cash Flow (FCF) | 279,158 | 6,037 | 6,800 | 5,113 | 5,568 | — |
| Peers' EBITDA Multiple | 11.4x | |||||
| Terminal Value | 134,294 | |||||
| WACC / Discount Rate | 11.26% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 264,657 | 5,145 | 5,208 | 3,520 | 3,445 | 78,777 |
| Enterprise Value | 360,752 | |||||
| Projection Period | 281,975 | 78.2% | ||||
| Terminal Value | 78,777 | 21.8% | ||||
| (−) Current Net Debt | 33,425 | |||||
| Equity Value | 327,327 | |||||
| (÷) Outstanding Shares | 1285M | |||||
| Fair Price | $255 | +465.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.4x | 9.4x | 11.4x | 13.4x | 15.4x |
|---|---|---|---|---|---|
| 9.3% | $240 | $251 | $263 | $275 | $287 |
| 10.3% | $236 | $248 | $259 | $270 | $281 |
| 11.3% | $233 | $244 | $255 | $265 | $276 |
| 12.3% | $230 | $241 | $251 | $261 | $271 |
| 13.3% | $227 | $237 | $247 | $257 | $267 |
Current price: $45.01. 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.