ALLE
Allegion plc
$130.43
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 14.5% below fair value
You pay
$130.43
Bear
$106.82
Fair
$152.63
Bull
$197.77
Bear
$106.82
-18.1%
6% stage 1 growth, 11% discount
Fair
$152.63
+17.0%
10% stage 1 growth, 11% discount
Bull
$197.77
+51.6%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
19.8x
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 $172.50 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $152.63 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