Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Westinghouse Air Brake Technologies Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.4% 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 64, DPO 70, DIO 123). At a 8.5% WACC with mid-year discounting, the terminal value (83% 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 $190.11 per share, suggesting WAB is overvalued by 23.0% at the current price of $247.00.
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 | 1,758 | 1,864 | 1,980 | 1,946 | 2,127 | 2,180 |
| (−) Net Interest | 264 | 280 | 297 | 292 | 319 | 327 |
| (+) D&A | 186 | 208 | 229 | 246 | 257 | 264 |
| EBITDA | 2,208 | 2,352 | 2,506 | 2,483 | 2,703 | 2,770 |
| (−) Tax | 432 | 458 | 486 | 478 | 522 | — |
| (−) CapEx | 239 | 253 | 269 | 264 | 289 | — |
| (−) ΔWC | 157 | 205 | 224 | -66 | 350 | — |
| Free Cash Flow (FCF) | 1,380 | 1,436 | 1,527 | 1,807 | 1,542 | — |
| Peers' EBITDA Multiple | 16.8x | |||||
| Terminal Value | 46,599 | |||||
| WACC / Discount Rate | 8.49% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,325 | 1,271 | 1,246 | 1,359 | 1,069 | 31,007 |
| Enterprise Value | 37,276 | |||||
| Projection Period | 6,269 | 16.8% | ||||
| Terminal Value | 31,007 | 83.2% | ||||
| (−) Current Net Debt | 4,752 | |||||
| Equity Value | 32,524 | |||||
| (÷) Outstanding Shares | 171M | |||||
| Fair Price | $190 | -23.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.8x | 14.8x | 16.8x | 18.8x | 20.8x |
|---|---|---|---|---|---|
| 6.5% | $162 | $186 | $209 | $233 | $257 |
| 7.5% | $154 | $177 | $200 | $222 | $245 |
| 8.5% | $147 | $169 | $190 | $212 | $233 |
| 9.5% | $140 | $161 | $181 | $202 | $222 |
| 10.5% | $133 | $153 | $173 | $192 | $212 |
Current price: $247.00. 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.