AXTA
Axalta Coating Systems Ltd.
$32.88
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 69.9% above fair value
You pay
$32.88
Bear
$18.29
Fair
$19.36
Bull
$22.20
Bear
$18.29
-44.4%
3% stage 1 growth, 11% discount
Fair
$19.36
-41.1%
3% stage 1 growth, 11% discount
Bull
$22.20
-32.5%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
22.5x
Market is pricing in (growth)
10.6%
vs 3.4% 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 $35.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $19.36 per share.
Warnings
Wall Street's average price target is $35.00 (from 28 analysts). Our estimate is 60% 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