Kimco Realty CorporationKIMNYSE
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DCF Valuation
DCF Valuation Summary
Hold
Base Case: $24.28 per share
+6.9%
Upside to Target
Current
$22.71
Bull Case
$31.45
Base Case
$24.28
Bear Case
$18.05
Weighted Average Cost of Capital (WACC)
Cost of Equity (CAPM)
Risk-Free Rate (Rf)4.50%
Beta (β)1.08
Market Risk Premium4.50%
*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)
Cost of Equity (Re)9.34%
Cost of Debt
Pre-tax Cost of Debt3.08%
Tax Rate0.18%
After-tax Cost of Debt3.07%
Equity Weight (E/V)64.12%
Debt Weight (D/V)35.88%
WACC Calculation
WACC = (E/V × Re) + (D/V × Rd × (1-Tc))
WACC = (64.12% × 9.34%) + (35.88% × 3.07%)
= 7.09%
10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)
| Year | Year 1 | Year 3 | Year 5 | Year 7 | Year 10 |
|---|---|---|---|---|---|
| Revenue | $2.2B | $2.4B | $2.7B | $2.9B | $3.2B |
| EBIT | $952M | $1.1B | $1.2B | $965M | $765M |
| Tax | $2M | $2M | $2M | $2M | $1M |
| NOPAT | $950M | $1.1B | $1.2B | $963M | $764M |
| + Depreciation | $470M | $519M | $585M | $622M | $673M |
| - Capex | $121M | $134M | $151M | $160M | $173M |
| - Δ NWC | $36M | $93M | $55M | $53M | $48M |
| Free Cash Flow | $1.3B | $1.3B | $1.6B | $1.4B | $1.2B |
| Discount Factor | 0.934 | 0.814 | 0.710 | 0.619 | 0.504 |
| Present Value | $1.2B | $1.1B | $1.1B | $849M | $613M |
FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital
Terminal Value Calculation
Perpetuity Growth Method
Final Year FCF$1.6B
Terminal Growth Rate2.50%
WACC7.09%
TV = FCF₅ × (1+g) / (WACC-g)
Terminal Value$27.1B
PV of Terminal Value$19.3B
Exit Multiple Method
Final Year EBITDA$1.8B
Exit Multiple (EV/EBITDA)22.0x
TV = EBITDA₅ × Exit Multiple
Terminal Value$31.7B
PV of Terminal Value$22.5B
Valuation Summary
Perpetuity Growth Method
PV of Projected FCFs$9.5B
PV of Terminal Value$19.3B
Enterprise Value$23.1B
(-) Net Debt$7.9B
Equity Value$15.3B
Shares Outstanding$675M
Price per Share$22.60
Exit Multiple Method
PV of Projected FCFs$9.5B
PV of Terminal Value$22.5B
Enterprise Value$25.4B
(-) Net Debt$7.9B
Equity Value$17.5B
Shares Outstanding$675M
Price per Share$25.96
Base Case Fair Value
$24.28
Average of perpetuity growth and exit multiple methods
Sensitivity AnalysisPrice per Share
| WACC ↓ / Growth → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.09% | $33.31 | $38.50 | $45.69 | $56.32 | $56.91 |
| 6.09% | $24.37 | $27.19 | $30.79 | $35.55 | $42.16 |
| 7.09% | $18.81 | $20.52 | $22.60 | $25.18 | $28.49 |
| 8.09% | $15.07 | $16.18 | $17.49 | $19.06 | $20.98 |
| 9.09% | $12.42 | $13.18 | $14.06 | $15.09 | $16.29 |
How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.
Scenario Analysis
Bear Case
$18.05
-20.5% vs current
- • -25% vs analyst consensus
- • Terminal growth: 2.0%
- • Beta: 1.35
Base Case
$24.28
6.9% vs current
- • Analyst consensus
- • Terminal growth: 2.5%
- • Beta: 1.08
Bull Case
$31.45
38.5% vs current
- • +25% vs analyst consensus
- • Terminal growth: 3.0%
- • Beta: 0.91
Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Real Estate Sector
Growth Assumptions (Select Years)
Year 1 Revenue Growth2.69%
Year 3 Revenue Growth6.61%
Year 5 Revenue Growth3.37%
Year 7 Revenue Growth3.02%
Year 10 Revenue Growth2.50%
Terminal Growth Rate2.50%
Margin & Efficiency
EBIT Margin43.32%
Tax Rate0.18%
Capex / Revenue5.50%
NWC / Revenue62.02%
Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.
Institutional-Grade Methodology
Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta
Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (S&P 500: 22x P/E)
This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.