Regency Centers CorporationREGNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $87.74 per share(market-calibrated)

+10.3%

Upside to Fair Value

Current

$79.54

Pure Model

$87.90

Fair Value

$87.74

Bull Case

$118.86

Bear Case

$62.50

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

2.38%

Calibrated Growth

2.48%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $87.90.

What's Driving This Ratingfor REG

↓

CapEx normalizing toward maintenance

Historical CapEx is 12.31% of revenue (heavy investment phase). Model fades this to 2.50% by Year 10, freeing up ~$248M in annual FCF. This is the biggest driver of long-term cash flow improvement.

✓

Premium margins already priced in

EBIT margin of 38.83% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects 6.12% revenue growth, fading to 2.50% by Year 10. Revenue reaches $2.5B (vs $1.6B today).

✓

Model and market roughly agree

Market-implied terminal growth of 2.38% is close to the model's 2.50% (only 12bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 81.66% indicates efficient cash generation. FCF reaches $1.2B by Year 10 (49.35% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.94

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.74%

Cost of Debt

Pre-tax Cost of Debt2.86%

Tax Rate21.00%

After-tax Cost of Debt2.26%

Equity Weight (E/V)71.72%

Debt Weight (D/V)28.28%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (71.72% × 8.74%) + (28.28% × 2.26%)

= 6.91%

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	$1.6B	$1.8B	$2.1B	$2.3B	$2.5B
EBIT	$640M	$714M	$831M	$899M	$980M
Tax	$134M	$150M	$175M	$189M	$206M
NOPAT	$506M	$564M	$657M	$710M	$774M
+ Depreciation	$356M	$397M	$463M	$500M	$545M
- Capex	$203M	$186M	$170M	$134M	$63M
- Δ NWC	$17M	$21M	$17M	$15M	$11M
Free Cash Flow	$643M	$754M	$932M	$1.1B	$1.2B
Discount Factor	0.935	0.818	0.716	0.627	0.513
Present Value	$601M	$617M	$668M	$665M	$639M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.2B

Terminal Growth Rate2.50%

WACC6.91%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$29.0B

PV of Terminal Value$14.9B

Exit Multiple Method

Year 10 EBITDA$1.5B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$33.6B

PV of Terminal Value$17.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$6.4B

PV of Terminal Value$14.9B

Enterprise Value$21.3B

(-) Net Debt$5.8B

Equity Value$15.5B

Shares Outstanding189M

Price per Share$81.70

Exit Multiple Method

PV of Projected FCFs$6.4B

PV of Terminal Value$17.2B

Enterprise Value$23.6B

(-) Net Debt$5.8B

Equity Value$17.8B

Shares Outstanding189M

Price per Share$94.11

Pure Model Fair Value

$87.90

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.91%	$122.64	$133.44	$148.72	$165.25	$157.38
5.91%	$97.66	$103.37	$110.74	$120.66	$134.69
6.91%	$80.33	$83.73	$87.90	$93.14	$99.92
7.91%	$67.27	$69.46	$72.06	$75.18	$79.02
8.91%	$56.89	$58.38	$60.11	$62.13	$64.52

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

$62.50

-21.4% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.18

Base Case

$87.90

10.5% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.94

Bull Case

$118.86

49.4% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.80

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Real Estate Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.12%

Year 3 Revenue Growth7.03%

Year 5 Revenue Growth4.63%

Year 7 Revenue Growth3.78%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin38.83%

Tax Rate21.00%

Historical Capex / Rev12.31%

Terminal Capex / Rev2.50%

NWC / Revenue17.62%

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: 22x EV/EBITDA (Real Estate sector)

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.

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