Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Xcel Energy Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 8.1% to 6.0% 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 55, DPO 74, DIO 30). At a 5.7% WACC with mid-year discounting, the terminal value (85% 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 $177.46 per share, suggesting XEL is undervalued by 127.7% at the current price of $77.94.
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 | 4,040 | 4,376 | 4,719 | 5,111 | 5,418 | 5,553 |
| (−) Net Interest | 1,177 | 1,275 | 1,375 | 1,489 | 1,579 | 1,618 |
| (+) D&A | 4,654 | 4,857 | 5,069 | 5,126 | 4,984 | 5,109 |
| EBITDA | 9,871 | 10,508 | 11,162 | 11,727 | 11,981 | 12,280 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 5,259 | 5,696 | 6,142 | 6,653 | 7,052 | — |
| (−) ΔWC | 538 | 100 | 102 | 117 | 91 | — |
| Free Cash Flow (FCF) | 4,074 | 4,712 | 4,918 | 4,957 | 4,837 | — |
| Peers' EBITDA Multiple | 12.8x | |||||
| Terminal Value | 156,574 | |||||
| WACC / Discount Rate | 5.72% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,963 | 4,335 | 4,280 | 4,080 | 3,766 | 118,568 |
| Enterprise Value | 138,992 | |||||
| Projection Period | 20,424 | 14.7% | ||||
| Terminal Value | 118,568 | 85.3% | ||||
| (−) Current Net Debt | 34,507 | |||||
| Equity Value | 104,485 | |||||
| (÷) Outstanding Shares | 589M | |||||
| Fair Price | $177 | +127.6% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.8x | 10.8x | 12.8x | 14.8x | 16.8x |
|---|---|---|---|---|---|
| 3.7% | $130 | $165 | $199 | $234 | $269 |
| 4.7% | $122 | $155 | $188 | $221 | $254 |
| 5.7% | $114 | $146 | $177 | $209 | $241 |
| 6.7% | $107 | $137 | $167 | $198 | $228 |
| 7.7% | $100 | $129 | $158 | $187 | $215 |
Current price: $77.94. 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.