AZZ
AZZ Inc.
$137.90
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 35.4% below fair value
You pay
$137.90
Bear
$171.83
Fair
$213.38
Bull
$250.85
Bear
$171.83
+24.6%
4% stage 1 growth, 11% discount
Fair
$213.38
+54.7%
7% stage 1 growth, 11% discount
Bull
$250.85
+81.9%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
10.7x
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 $153.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $213.38 per share.
Warnings
Wall Street's average price target is $153.50 (from 12 analysts). Our estimate is 49% above 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