ARMK
Aramark
$54.78
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 168.1% above fair value
You pay
$54.78
Bear
$7.38
Fair
$20.44
Bull
$32.49
Bear
$7.38
-86.5%
5% stage 1 growth, 11% discount
Fair
$20.44
-62.7%
8% stage 1 growth, 11% discount
Bull
$32.49
-40.7%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
47.5x
Market is pricing in (growth)
20.5%
vs 7.6% 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 $55.25 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $20.44 per share.
Warnings
Wall Street's average price target is $55.25 (from 24 analysts). Our estimate is 84% 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