The Football Field Valuation Chart Explained

The football field is the signature output of investment banking valuation work — a horizontal bar chart showing implied share price ranges from each methodology used in a pitch or fairness opinion. If you've ever seen a valuation slide with stacked horizontal bars labeled "Trading Comps," "Precedent Transactions," "DCF," and "52-Week Range," that's a football field. This guide covers how to build one, what each bar means, and why bankers never present a single valuation number.

What a football field shows

A football field answers one question for a client or board: "What is this company worth across different approaches?"

Each horizontal bar represents the implied valuation range from one methodology:

$18 ──────────────────────────────────────────────
    │ Trading Comps (8.0x–10.5x EV/EBITDA)  │ $22–$29
    │ Precedent Transactions (9.5x–12.0x)   │ $26–$33
    │ DCF (WACC 8.5%–9.5%, g 2.0%–3.0%)    │ $24–$31
    │ 52-Week Trading Range                  │ $19–$25
    │ Analyst Price Targets                  │ $23–$30
$18 ──────────────────────────────────────────────
         $18    $20    $22    $24    $26    $28    $30    $32
                        Implied Share Price ($)

The overlap across bars is where "fair value" lives — not at any single point, but in the range where multiple methodologies converge.

Building each bar

Trading Comps bar

Low:  Target EBITDA × 25th percentile comp multiple → EV → equity → per share
High: Target EBITDA × 75th percentile comp multiple → EV → equity → per share
Mid:  Target EBITDA × median comp multiple

Use the interquartile range (25th to 75th percentile), not the full min-max range — outliers distort the ends.

Precedent Transactions bar

Same structure as comps, but using M&A transaction multiples:

Low:  Target EBITDA × 25th percentile precedent EV/EBITDA
High: Target EBITDA × 75th percentile precedent EV/EBITDA

Precedent bars are typically above trading comps bars because of the control premium embedded in M&A pricing.

DCF bar

Show a sensitivity range, not a single point:

Low:  DCF at higher WACC + lower terminal growth (or lower exit multiple)
High: DCF at lower WACC + higher terminal growth (or higher exit multiple)
Base: Midpoint assumptions

Example sensitivity:

WACC: 8.0% / 8.5% / 9.0%
Terminal Growth: 2.0% / 2.5% / 3.0%
→ 9 combinations; use the min and max implied prices as the bar endpoints

Or for exit-multiple DCF:

Exit Multiple: 8.0x / 9.0x / 10.0x
WACC: 8.0% / 8.5% / 9.0%
→ Range from lowest to highest implied price

52-Week Trading Range bar

Simple: the stock's high and low over the past 52 weeks. This is a market-observed range, not an analytical one — it shows where the stock has actually traded.

Useful as a reality check: if your DCF and comps imply $30–$35 but the stock has never traded above $25, investigate the gap before presenting.

Analyst Price Targets bar (optional)

Consensus or range of sell-side analyst price targets. Another market-observed reference point.

LBO Analysis bar (optional, common in PE pitches)

The highest price a financial sponsor could pay and still achieve target returns (typically 20%+ IRR):

Max Entry EV = Exit EV at target returns, worked backwards through debt paydown
→ "A sponsor could pay up to $X and still hit 20% IRR"

This bar often sets the ceiling on the football field — it's the maximum a financial buyer would pay.

Why a range, not a point

No single valuation methodology is "correct":

| Methodology | Weakness | |-------------|----------| | Trading comps | Depends on peer selection; no two companies are identical | | Precedent transactions | Past deals may not repeat; premiums vary by process | | DCF | Highly sensitive to terminal value assumptions (60%–80% of value) | | 52-week range | Backward-looking; may not reflect current fundamentals |

Presenting one number implies false precision. The football field shows the range of reasonable outcomes and lets the client or board decide where the company falls within it.

How to read the overlap

The most defensible valuation is where the most bars overlap:

If comps, precedents, and DCF all overlap at $24–$28:
  → Strong case that fair value is in that range

If DCF implies $30 but comps imply $22:
  → Investigate the gap (aggressive DCF assumptions? wrong comp set?)
  → Present both and explain the divergence

In a sell-side pitch, the banker emphasizes the bars that support a higher price (precedents, DCF upside). In a buy-side pitch, the banker emphasizes the bars that support a lower price (comps, DCF downside).

Football field in different contexts

M&A fairness opinion

Board needs to confirm the offer price is "fair from a financial point of view." The football field shows whether the offer falls within the range of analytical methodologies. If the offer is above all bars, it's premium; if below all bars, it's inadequate.

IPO pricing

Football field helps set the IPO price range. Underwriters want the IPO price within the overlap of comps and DCF, typically at a discount to trading comps (IPO discount of 10%–15% is common).

PE pitch to LPs

Shows the entry price relative to analytical value. "We're buying at 9.0x; comps trade at 10.5x–12.0x" — the football field visualizes the discount.

Common interview questions

"What is a football field?" A horizontal bar chart showing implied valuation ranges from each methodology (comps, precedents, DCF, trading range). The overlap across bars represents the defensible valuation range.

"Why not just use DCF?" DCF is sensitive to terminal value and WACC assumptions. Comps and precedents provide market-observed reality checks. Presenting all three is more honest and more defensible.

"Which methodology is most reliable?" None is universally most reliable — it depends on the company and context. Precedents for M&A targets, comps for liquid public companies, DCF for unique businesses without good peers. The football field shows all of them.

"How do you build the DCF bar?" Run a sensitivity table across WACC and terminal growth (or exit multiple). Use the minimum and maximum implied share prices as the bar endpoints. Never show a single DCF point on the football field.

Building your first football field

1. Calculate implied share price from trading comps (25th–75th percentile)
2. Calculate implied share price from precedent transactions (25th–75th percentile)
3. Run DCF sensitivity (WACC × terminal growth or exit multiple)
4. Add 52-week trading range
5. Plot all bars on a horizontal axis (share price)
6. Identify the overlap zone
7. Present with commentary on which methodologies are most relevant and why

The football field is the visual proof that you've done the work across multiple approaches — and the format that MDs, clients, and boards expect in every valuation discussion.