AYI
Acuity Brands, Inc.
$344.18
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 2.5% below fair value
You pay
$344.18
Bear
$259.98
Fair
$352.97
Bull
$443.44
Bear
$259.98
-24.5%
6% stage 1 growth, 11% discount
Fair
$352.97
+2.6%
10% stage 1 growth, 11% discount
Bull
$443.44
+28.8%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
21.8x
Market is pricing in (growth)
10.2%
vs 9.7% 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 $404.33 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $352.97 per share.
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