ALLE
Allegion plc
$137.30
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 7.2% below fair value
You pay
$137.30
Bear
$103.50
Fair
$147.88
Bull
$191.62
Bear
$103.50
-24.6%
6% stage 1 growth, 11% discount
Fair
$147.88
+7.7%
10% stage 1 growth, 11% discount
Bull
$191.62
+39.6%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
20.7x
Market is pricing in (growth)
9.4%
vs 10.2% 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 $153.50 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $147.88 per share.
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