ALB
Albemarle Corporation
$135.56
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.8% below fair value
You pay
$135.56
Bear
$93.11
Fair
$140.95
Bull
$190.59
Bear
$93.11
-31.3%
7% stage 1 growth, 12% discount
Fair
$140.95
+4.0%
12% stage 1 growth, 12% discount
Bull
$190.59
+40.6%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
26.7x
Market is pricing in (growth)
14.8%
vs 12.4% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $209.75 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $140.95 per share.
Warnings
Wall Street's average price target is $209.75 (from 45 analysts). Our estimate is 47% 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