Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Vulcan Materials Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.6% to 9.3% 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 47, DPO 28, DIO 42). At a 8.7% WACC with mid-year discounting, the terminal value (88% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $239.52 per share, suggesting VMC is fairly valued by 10.1% at the current price of $266.33.
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 | 1,185 | 1,265 | 1,354 | 1,468 | 1,605 | 1,645 |
| (−) Net Interest | 258 | 275 | 294 | 319 | 349 | 358 |
| (+) D&A | 644 | 696 | 727 | 715 | 772 | 791 |
| EBITDA | 2,086 | 2,236 | 2,375 | 2,503 | 2,726 | 2,794 |
| (−) Tax | 269 | 287 | 307 | 333 | 364 | — |
| (−) CapEx | 715 | 763 | 817 | 886 | 969 | — |
| (−) ΔWC | 139 | 85 | 95 | 122 | 147 | — |
| Free Cash Flow (FCF) | 962 | 1,100 | 1,154 | 1,161 | 1,246 | — |
| Peers' EBITDA Multiple | 17.5x | |||||
| Terminal Value | 48,870 | |||||
| WACC / Discount Rate | 8.66% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 923 | 971 | 938 | 868 | 858 | 32,269 |
| Enterprise Value | 36,827 | |||||
| Projection Period | 4,558 | 12.4% | ||||
| Terminal Value | 32,269 | 87.6% | ||||
| (−) Current Net Debt | 5,224 | |||||
| Equity Value | 31,603 | |||||
| (÷) Outstanding Shares | 132M | |||||
| Fair Price | $240 | -10.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.5x | 15.5x | 17.5x | 19.5x | 21.5x |
|---|---|---|---|---|---|
| 6.7% | $204 | $234 | $265 | $296 | $326 |
| 7.7% | $193 | $223 | $252 | $281 | $310 |
| 8.7% | $184 | $212 | $240 | $267 | $295 |
| 9.7% | $174 | $201 | $228 | $255 | $281 |
| 10.7% | $166 | $191 | $217 | $242 | $268 |
Current price: $266.33. 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.