CBT
Cabot Corp.
$77.11
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 29.8% below fair value
You pay
$77.11
Bear
$90.21
Fair
$109.91
Bull
$127.17
Bear
$90.21
+17.0%
3% stage 1 growth, 11% discount
Fair
$109.91
+42.5%
6% stage 1 growth, 11% discount
Bull
$127.17
+64.9%
7% stage 1 growth, 11% discount
Adjust Assumptions
5.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
11.7x
Market is pricing in (growth)
1.6%
vs 5.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$94.00
Divergence from AlphaVal
17%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $109.91 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