CBT
Cabot Corp.
$90.39
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 6.4% above fair value
You pay
$90.39
Bear
$75.93
Fair
$84.93
Bull
$95.08
Bear
$75.93
-16.0%
3% stage 1 growth, 11% discount
Fair
$84.93
-6.0%
4% stage 1 growth, 11% discount
Bull
$95.08
+5.2%
6% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
34%
Implied Market Multiple
15.1x
Market is pricing in (growth)
5.2%
vs 4.2% 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 $89.75 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $84.93 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