DCF Studio

    XEL · NMS · Utilities

    Xcel Energy Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD -13.64

    Market price

    USD 79.33

    Implied upside

    -117.2%

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

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 50.2% of revenue against depreciation of 19.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD -13.64-117.2%
    Exit multiple
    USD 64.17-19.1%
    Market price
    USD 79.33

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -3bn-0bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 15.6bnUSD 17.2bnUSD 18.7bnUSD 20.3bnUSD 21.7bnUSD 23.1bnUSD 24.3bnUSD 25.4bnUSD 26.3bnUSD 26.9bn+6.2%
    EBITUSD 2.8bnUSD 3.1bnUSD 3.3bnUSD 3.6bnUSD 3.9bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.7bnUSD 4.8bn+6.2%
    NOPATUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.6bnUSD 3.7bnUSD 3.8bn+6.2%
    Add depreciation & amortisationUSD 3.0bnUSD 3.3bnUSD 3.6bnUSD 3.9bnUSD 4.2bnUSD 4.5bnUSD 4.7bnUSD 4.9bnUSD 5.1bnUSD 5.2bn+6.2%
    Less capital expenditureUSD -7.8bnUSD -8.1bnUSD -8.3bnUSD -8.5bnUSD -8.4bnUSD -8.3bnUSD -8.1bnUSD -7.7bnUSD -7.2bnUSD -6.7bn-1.8%
    Capex, % of revenue50.2%47.3%44.5%41.7%38.9%36.0%33.2%30.4%27.6%24.7%-
    Less increase in working capitalUSD -16.3mUSD -26.8mUSD -26.7mUSD -26.1mUSD -25.0mUSD -23.3mUSD -21.0mUSD -18.3mUSD -15.0mUSD -11.2m-4.0%
    Free cashflow to firmUSD -2.6bnUSD -2.4bnUSD -2.1bnUSD -1.7bnUSD -1.2bnUSD -631.9mUSD 25.0mUSD 747.0mUSD 1.5bnUSD 2.3bn-
    Discount factor0.96910.91020.85480.80280.75400.70810.66500.62460.58660.5509-
    Present valueUSD -2.6bnUSD -2.2bnUSD -1.8bnUSD -1.4bnUSD -913.6mUSD -447.5mUSD 16.6mUSD 466.6mUSD 890.7mUSD 1.3bn-
    Present Value Of The ForecastUSD -6.6bn

    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
    Beta0.561Reported 0.345, pulled toward 1.0 (Blume)
    Cost of equity7.27%Risk-free + beta x equity risk premium
    Cost of debt6.73%Risk-free + 184bp, the spread for a BB rating at 2.1x interest cover. Book interest / average debt was lower, at 4.1%.
    Market capitalisationUSD 50.9bn59.4% of capital
    Total debtUSD 34.8bn40.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.48%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 -13.64

    125% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 3.8bn
    Less reinvestment at g/ROIC (38.6% of NOPAT)
    USD -1.5bn
    Capitalised
    USD 2.3bn
    ROIC (WACC floor)
    6.5%
    Terminal value, undiscounted
    USD 60.1bn
    Terminal value, discounted
    USD 33.1bn
    Enterprise value
    USD 26.5bn
    Less net debt
    USD 34.5bn
    Equity value
    USD -8.0bn

    Exit at 14.3x EBITDA

    Value per shareUSD 64.17

    109% of EV

    Terminal value, undiscounted
    USD 143.3bn
    Terminal value, discounted
    USD 78.9bn
    Enterprise value
    USD 72.3bn
    Less net debt
    USD 34.5bn
    Equity value
    USD 37.8bn

    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%
    4.48%27.8125.8923.9622.0420.12
    5.48%4.462.981.500.02-1.46
    6.48%-11.28-12.46-13.64-14.82-16.00
    7.48%-22.48-23.45-24.42-25.38-26.35
    8.48%-30.79-31.59-32.40-33.21-34.01

    Outlined: this model. Green text: above today's price of 79.33. 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 year-1.4%6.3%17.4%
    EBIT margin19.6%17.9%37.0%
    Discount rate-6.5%3.8%
    Download as Excel

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