AIT
Applied Industrial Technologies, Inc.
$335.00
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 73.4% above fair value
You pay
$335.00
Bear
$158.92
Fair
$193.19
Bull
$223.73
Bear
$158.92
-52.6%
4% stage 1 growth, 11% discount
Fair
$193.19
-42.3%
6% stage 1 growth, 11% discount
Bull
$223.73
-33.2%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
36%
Implied Market Multiple
27.9x
Market is pricing in (growth)
13.4%
vs 6.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (17 analysts)
$402.00
Divergence from AlphaVal
52%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $193.19 per share.
Warnings
Wall Street's average price target is $402.00 (from 17 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions