DCF Studio

    SOLV · NYQ · Healthcare

    Solventum Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 74.47

    Market price

    USD 84.75

    Implied upside

    -12.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 74.47-12.1%
    Exit multiple
    USD 130.77+54.3%
    Market price
    USD 84.75

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 8.2bnUSD 8.5bnUSD 8.8bnUSD 9.1bnUSD 9.4bnUSD 9.7bnUSD 10.0bnUSD 10.2bnUSD 10.5bnUSD 10.8bn+3.0%
    EBITUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bn+3.0%
    NOPATUSD 1.0bnUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+3.0%
    Add depreciation & amortisationUSD 546.1mUSD 565.5mUSD 585.0mUSD 604.3mUSD 623.4mUSD 642.4mUSD 661.0mUSD 679.3mUSD 697.2mUSD 714.6m+3.0%
    Less capital expenditureUSD -324.6mUSD -392.4mUSD -464.0mUSD -539.4mUSD -618.4mUSD -701.0mUSD -787.0mUSD -876.3mUSD -968.7mUSD -1.1bn+14.1%
    Capex, % of revenue3.9%4.6%5.3%5.9%6.6%7.2%7.9%8.6%9.2%9.9%-
    Less increase in working capitalUSD 18.5mUSD -55.2mUSD -55.1mUSD -54.7mUSD -54.3mUSD -53.6mUSD -52.8mUSD -51.8mUSD -50.7mUSD -49.4m-
    Free cashflow to firmUSD 1.2bnUSD 1.2bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.0bnUSD 999.0mUSD 958.5mUSD 914.0m-3.4%
    Discount factor0.96380.89520.83150.77230.71730.66630.61890.57480.53390.4959-
    Present valueUSD 1.2bnUSD 1.0bnUSD 948.3mUSD 865.2mUSD 786.2mUSD 711.4mUSD 640.8mUSD 574.2mUSD 511.8mUSD 453.3m-
    Present Value Of The ForecastUSD 7.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.831Reported 0.748, pulled toward 1.0 (Blume)
    Cost of equity8.41%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a B+ rating at 1.8x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 5.3%.
    Market capitalisationUSD 14.4bn74.1% of capital
    Total debtUSD 5.0bn25.9% of capital, book value as a proxy
    Tax rate19.9%Effective, capped at statutory
    WACC7.66%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 74.47

    55% of EV

    Forecast FCFF, final year
    USD 914.0m
    Capex at depreciation, working capital in reinvestment
    USD 1.3bn
    Less reinvestment at g/ROIC (26.6% of NOPAT)
    USD -349.4m
    Capitalised
    USD 963.4m
    ROIC (reported)
    9.4%
    Terminal value, undiscounted
    USD 19.1bn
    Terminal value, discounted
    USD 9.5bn
    Enterprise value
    USD 17.2bn
    Less net debt
    USD 4.2bn
    Equity value
    USD 13.1bn

    Exit at 16.6x EBITDA

    Value per shareUSD 130.77

    71% of EV

    Terminal value, undiscounted
    USD 39.0bn
    Terminal value, discounted
    USD 19.4bn
    Enterprise value
    USD 27.1bn
    Less net debt
    USD 4.2bn
    Equity value
    USD 22.9bn

    Spread between methods: 55%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.66%117.49122.56129.57139.60154.74
    6.66%91.5693.1995.4698.60103.06
    7.66%74.0174.1474.4775.0876.05
    8.66%61.3360.7660.2359.7659.38
    9.66%51.9951.1850.3749.5748.76

    Outlined: this model. Green text: above today's price of 84.75. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year0.8%2.6%3.9%
    EBIT margin20.8%15.2%16.9%
    Discount rate-7.7%7.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.