AYI
Acuity Brands, Inc.
$287.59
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.0% below fair value
You pay
$287.59
Bear
$234.47
Fair
$316.14
Bull
$395.24
Bear
$234.47
-18.5%
6% stage 1 growth, 12% discount
Fair
$316.14
+9.9%
10% stage 1 growth, 12% discount
Bull
$395.24
+37.4%
13% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
34%
Implied Market Multiple
18.6x
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 $392.50 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $316.14 per share.
Warnings
Wall Street's average price target is $392.50 (from 33 analysts). Our estimate is 28% 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