AXTA
Axalta Coating Systems Ltd.
$32.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 52.4% above fair value
You pay
$32.63
Bear
$21.42
Fair
$21.42
Bull
$23.73
Bear
$21.42
-34.4%
3% stage 1 growth, 11% discount
Fair
$21.42
-34.4%
3% stage 1 growth, 11% discount
Bull
$23.73
-27.3%
4% stage 1 growth, 11% discount
Adjust Assumptions
3.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
17.1x
Market is pricing in (growth)
6.9%
vs 3.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$37.00
Divergence from AlphaVal
42%
Summary
Using a two-stage FCF DCF with 3% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $21.42 per share.
Warnings
Wall Street's average price target is $37.00 (from 28 analysts). Our estimate is 42% 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