Using an unlevered Free Cash Flow to Firm (FCFF) model, we project WEC Energy Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.9% to 2.4% 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 69, DPO 74, DIO 53). At a 6.2% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $225.47 per share, suggesting WEC is undervalued by 97.7% at the current price of $114.06.
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 | 3,198 | 3,400 | 3,600 | 3,738 | 3,828 | 3,924 |
| (−) Net Interest | 748 | 796 | 842 | 874 | 896 | 918 |
| (+) D&A | 2,848 | 3,016 | 3,212 | 3,410 | 3,577 | 3,666 |
| EBITDA | 6,795 | 7,212 | 7,654 | 8,022 | 8,301 | 8,508 |
| (−) Tax | 416 | 443 | 469 | 486 | 498 | — |
| (−) CapEx | 3,095 | 3,291 | 3,484 | 3,617 | 3,705 | — |
| (−) ΔWC | -191 | 97 | 96 | 66 | 43 | — |
| Free Cash Flow (FCF) | 3,474 | 3,382 | 3,605 | 3,852 | 4,054 | — |
| Peers' EBITDA Multiple | 12.8x | |||||
| Terminal Value | 108,480 | |||||
| WACC / Discount Rate | 6.16% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,372 | 3,092 | 3,105 | 3,125 | 3,098 | 80,457 |
| Enterprise Value | 96,249 | |||||
| Projection Period | 15,792 | 16.4% | ||||
| Terminal Value | 80,457 | 83.6% | ||||
| (−) Current Net Debt | 22,287 | |||||
| Equity Value | 73,963 | |||||
| (÷) Outstanding Shares | 328M | |||||
| Fair Price | $226 | +97.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.7x | 10.7x | 12.7x | 14.7x | 16.7x |
|---|---|---|---|---|---|
| 4.2% | $168 | $210 | $252 | $295 | $337 |
| 5.2% | $158 | $198 | $238 | $279 | $319 |
| 6.2% | $148 | $187 | $225 | $264 | $302 |
| 7.2% | $140 | $176 | $213 | $250 | $287 |
| 8.2% | $131 | $166 | $201 | $237 | $272 |
Current price: $114.06. 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.