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    VLTO · NYQ · Industrials

    Veralto Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 83.49

    Market price

    USD 115.70

    Implied upside

    -27.8%

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

    AdjustedReported capital expenditure averages just 0.99% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 21.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 83.49-27.8%
    Exit multiple
    USD 111.46-3.7%
    Market price
    USD 115.70

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 5.9bnUSD 6.3bnUSD 6.6bnUSD 6.9bnUSD 7.1bnUSD 7.4bnUSD 7.7bnUSD 7.9bnUSD 8.2bnUSD 8.4bn+3.9%
    EBITUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bn+3.9%
    NOPATUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bn+3.9%
    Add depreciation & amortisationUSD 96.5mUSD 101.6mUSD 106.6mUSD 111.5mUSD 116.2mUSD 120.7mUSD 124.9mUSD 128.9mUSD 132.6mUSD 135.9m+3.9%
    Less capital expenditureUSD -59.4mUSD -76.2mUSD -94.3mUSD -113.7mUSD -134.1mUSD -155.6mUSD -177.9mUSD -201.0mUSD -224.5mUSD -248.5m+17.2%
    Capex, % of revenue1.0%1.2%1.4%1.7%1.9%2.1%2.3%2.5%2.8%3.0%-
    Less increase in working capitalUSD -61.6mUSD -43.8mUSD -43.1mUSD -42.0mUSD -40.6mUSD -38.9mUSD -36.8mUSD -34.4mUSD -31.7mUSD -28.7m-8.1%
    Free cashflow to firmUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bn+3.0%
    Discount factor0.96310.89340.82870.76870.71300.66140.61350.56910.52790.4896-
    Present valueUSD 1.0bnUSD 998.6mUSD 962.2mUSD 924.0mUSD 884.3mUSD 843.5mUSD 801.8mUSD 759.6mUSD 717.1mUSD 674.7m-
    Present Value Of The ForecastUSD 8.6bn

    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
    Beta0.776Reported 0.666, pulled toward 1.0 (Blume)
    Cost of equity8.18%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 13.3x interest cover. Book interest / average debt was lower, at 3.4%.
    Market capitalisationUSD 28.1bn90.7% of capital
    Total debtUSD 2.9bn9.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.81%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 83.49

    61% of EV

    Forecast FCFF, final year
    USD 1.4bn
    Capex at depreciation, working capital in reinvestment
    USD 1.6bn
    Less reinvestment at g/ROIC (11.6% of NOPAT)
    USD -183.0m
    Capitalised
    USD 1.4bn
    ROIC (reported)
    21.5%
    Terminal value, undiscounted
    USD 26.9bn
    Terminal value, discounted
    USD 13.2bn
    Enterprise value
    USD 21.7bn
    Less net debt
    USD 848.0m
    Equity value
    USD 20.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 111.46

    70% of EV

    Terminal value, undiscounted
    USD 41.2bn
    Terminal value, discounted
    USD 20.2bn
    Enterprise value
    USD 28.7bn
    Less net debt
    USD 848.0m
    Equity value
    USD 27.9bn

    Spread between methods: 29%.

    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%
    5.81%115.67123.97134.89149.84171.43
    6.81%93.1897.64103.23110.37119.78
    7.81%77.8480.3983.4987.3192.09
    8.81%66.7168.2270.0272.1874.80
    9.81%58.2859.1760.2361.4862.98

    Outlined: this model. Green text: above today's price of 115.70. 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 year4.2%4.3%8.2%
    EBIT margin23.3%23.0%31.7%
    Discount rate-7.8%6.3%
    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.