AWI
Armstrong World Industries, Inc.
$162.32
Platform & Compounding FCF
70%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 11.1% above fair value
You pay
$162.32
Bear
$100.55
Fair
$146.09
Bull
$192.65
Bear
$100.55
-38.1%
7% stage 1 growth, 11% discount
Fair
$146.09
-10.0%
12% stage 1 growth, 11% discount
Bull
$192.65
+18.7%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
26.8x
Market is pricing in (growth)
12.9%
vs 11.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$207.60
Divergence from AlphaVal
30%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $146.09 per share.
Warnings
Wall Street's average price target is $207.60 (from 27 analysts). Our estimate is 30% 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