Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Weyerhaeuser Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 3.0% 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 17, DPO 16, DIO 34). At a 7.4% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $26.60 per share, suggesting WY is fairly valued by 13.5% at the current price of $23.43.
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 | 1,052 | 1,145 | 1,188 | 1,078 | 978 | 1,002 |
| (−) Net Interest | 243 | 265 | 275 | 249 | 226 | 232 |
| (+) D&A | 635 | 626 | 592 | 580 | 558 | 572 |
| EBITDA | 1,930 | 2,036 | 2,056 | 1,907 | 1,762 | 1,806 |
| (−) Tax | 69 | 75 | 78 | 71 | 64 | — |
| (−) CapEx | 546 | 595 | 617 | 560 | 508 | — |
| (−) ΔWC | -32 | 53 | 24 | -63 | -57 | — |
| Free Cash Flow (FCF) | 1,347 | 1,313 | 1,336 | 1,339 | 1,247 | — |
| Peers' EBITDA Multiple | 14.8x | |||||
| Terminal Value | 26,767 | |||||
| WACC / Discount Rate | 7.37% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,300 | 1,180 | 1,118 | 1,044 | 905 | 18,759 |
| Enterprise Value | 24,307 | |||||
| Projection Period | 5,548 | 22.8% | ||||
| Terminal Value | 18,759 | 77.2% | ||||
| (−) Current Net Debt | 5,108 | |||||
| Equity Value | 19,199 | |||||
| (÷) Outstanding Shares | 722M | |||||
| Fair Price | $27 | +13.5% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.8x | 12.8x | 14.8x | 16.8x | 18.8x |
|---|---|---|---|---|---|
| 5.4% | $22 | $26 | $30 | $33 | $37 |
| 6.4% | $21 | $24 | $28 | $32 | $35 |
| 7.4% | $20 | $23 | $27 | $30 | $34 |
| 8.4% | $19 | $22 | $25 | $29 | $32 |
| 9.4% | $18 | $21 | $24 | $27 | $30 |
Current price: $23.43. 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.