Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Willis Towers Watson Public Limited Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.3% to 1.9% 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 97, DPO 69, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 7.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $336.49 per share, suggesting WTW is undervalued by 17.0% at the current price of $287.51.
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 | 3,727 | 3,949 | 4,210 | 4,291 | 4,373 | 4,483 |
| (−) Net Interest | 263 | 278 | 297 | 302 | 308 | 316 |
| (+) D&A | 224 | 234 | 246 | 255 | 263 | 270 |
| EBITDA | 4,214 | 4,461 | 4,754 | 4,848 | 4,945 | 5,069 |
| (−) Tax | 1,864 | 1,974 | 2,105 | 2,146 | 2,187 | — |
| (−) CapEx | 250 | 265 | 283 | 288 | 294 | — |
| (−) ΔWC | -56 | 157 | 186 | 57 | 58 | — |
| Free Cash Flow (FCF) | 2,156 | 2,064 | 2,180 | 2,357 | 2,406 | — |
| Peers' EBITDA Multiple | 7.8x | |||||
| Terminal Value | 39,585 | |||||
| WACC / Discount Rate | 7.38% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,081 | 1,855 | 1,824 | 1,837 | 1,746 | 27,727 |
| Enterprise Value | 37,071 | |||||
| Projection Period | 9,344 | 25.2% | ||||
| Terminal Value | 27,727 | 74.8% | ||||
| (−) Current Net Debt | 3,771 | |||||
| Equity Value | 33,300 | |||||
| (÷) Outstanding Shares | 99M | |||||
| Fair Price | $336 | +17.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 3.8x | 5.8x | 7.8x | 9.8x | 11.8x |
|---|---|---|---|---|---|
| 5.4% | $211 | $290 | $369 | $447 | $526 |
| 6.4% | $202 | $277 | $352 | $427 | $502 |
| 7.4% | $193 | $265 | $336 | $408 | $480 |
| 8.4% | $185 | $253 | $322 | $390 | $459 |
| 9.4% | $177 | $242 | $308 | $373 | $438 |
Current price: $287.51. 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.