Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The TJX Companies, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 5.7% to 5.6% 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 4, DPO 40, DIO 61). At a 8.4% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 18.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $122.52 per share, suggesting TJX is overvalued by 22.9% at the current price of $158.89.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 6,715 | 7,105 | 7,649 | 7,942 | 8,387 | 8,597 |
| (−) Net Interest | 89 | 94 | 101 | 105 | 111 | 113 |
| (+) D&A | 1,620 | 1,791 | 1,902 | 1,991 | 2,057 | 2,108 |
| EBITDA | 8,423 | 8,990 | 9,652 | 10,038 | 10,554 | 10,818 |
| (−) Tax | 1,674 | 1,771 | 1,907 | 1,980 | 2,090 | — |
| (−) CapEx | 1,901 | 2,011 | 2,166 | 2,249 | 2,374 | — |
| (−) ΔWC | 566 | 191 | 267 | 143 | 218 | — |
| Free Cash Flow (FCF) | 4,283 | 5,016 | 5,313 | 5,666 | 5,872 | — |
| Peers' EBITDA Multiple | 18.3x | |||||
| Terminal Value | 198,403 | |||||
| WACC / Discount Rate | 8.37% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,114 | 4,447 | 4,346 | 4,277 | 4,090 | 132,752 |
| Enterprise Value | 154,026 | |||||
| Projection Period | 21,274 | 13.8% | ||||
| Terminal Value | 132,752 | 86.2% | ||||
| (−) Current Net Debt | 16,153 | |||||
| Equity Value | 137,873 | |||||
| (÷) Outstanding Shares | 1125M | |||||
| Fair Price | $123 | -22.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 14.3x | 16.3x | 18.3x | 20.3x | 22.3x |
|---|---|---|---|---|---|
| 6.4% | $107 | $121 | $135 | $149 | $163 |
| 7.4% | $102 | $115 | $129 | $142 | $156 |
| 8.4% | $97 | $110 | $123 | $135 | $148 |
| 9.4% | $92 | $105 | $117 | $129 | $141 |
| 10.4% | $88 | $100 | $111 | $123 | $135 |
Current price: $158.89. 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.