AXTA
Axalta Coating Systems Ltd.
$29.22
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 52.9% above fair value
You pay
$29.22
Bear
$18.05
Fair
$19.11
Bull
$21.92
Bear
$18.05
-38.2%
3% stage 1 growth, 11% discount
Fair
$19.11
-34.6%
3% stage 1 growth, 11% discount
Bull
$21.92
-25.0%
4% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
20.7x
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 $34.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $19.11 per share.
Warnings
Wall Street's average price target is $34.00 (from 28 analysts). Our estimate is 58% 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