Using an unlevered Free Cash Flow to Firm (FCFF) model, we project United Airlines Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.7% to 4.7% 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 16, DPO 46, DIO 17). At a 7.1% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $1176.36 per share, suggesting UAL is undervalued by 1166.3% at the current price of $92.90.
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 | 15,131 | 16,118 | 17,107 | 17,866 | 18,700 | 19,167 |
| (−) Net Interest | 2,306 | 2,456 | 2,607 | 2,723 | 2,850 | 2,921 |
| (+) D&A | 5,117 | 6,042 | 6,513 | 6,601 | 7,068 | 7,245 |
| EBITDA | 22,553 | 24,616 | 26,226 | 27,190 | 28,617 | 29,333 |
| (−) Tax | 3,587 | 3,822 | 4,056 | 4,236 | 4,434 | — |
| (−) CapEx | 6,733 | 7,172 | 7,612 | 7,950 | 8,321 | — |
| (−) ΔWC | -106 | -47 | -47 | -36 | -40 | — |
| Free Cash Flow (FCF) | 12,339 | 13,670 | 14,606 | 15,040 | 15,903 | — |
| Peers' EBITDA Multiple | 16.8x | |||||
| Terminal Value | 493,378 | |||||
| WACC / Discount Rate | 7.13% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 11,922 | 12,329 | 12,297 | 11,820 | 11,666 | 349,692 |
| Enterprise Value | 409,726 | |||||
| Projection Period | 60,033 | 14.7% | ||||
| Terminal Value | 349,692 | 85.3% | ||||
| (−) Current Net Debt | 25,094 | |||||
| Equity Value | 384,632 | |||||
| (÷) Outstanding Shares | 327M | |||||
| Fair Price | $1176 | +1166.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.8x | 14.8x | 16.8x | 18.8x | 20.8x |
|---|---|---|---|---|---|
| 5.1% | $1011 | $1151 | $1291 | $1431 | $1570 |
| 6.1% | $966 | $1099 | $1232 | $1365 | $1499 |
| 7.1% | $922 | $1049 | $1176 | $1304 | $1431 |
| 8.1% | $881 | $1002 | $1124 | $1245 | $1366 |
| 9.1% | $842 | $958 | $1074 | $1190 | $1306 |
Current price: $92.90. 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.