COL
Rockwell Collins, Inc.
$141.04
Platform & Compounding FCF
70%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 8.1% above fair value
You pay
$141.04
Bear
$72.90
Fair
$130.49
Bull
$192.24
Bear
$72.90
-48.3%
8% stage 1 growth, 11% discount
Fair
$130.49
-7.5%
13% stage 1 growth, 11% discount
Bull
$192.24
+36.3%
17% stage 1 growth, 11% discount
Adjust Assumptions
13.5%
11.0%
3.0%
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
42%
Implied Market Multiple
29.6x
Market is pricing in (growth)
14.2%
vs 13.5% base
Summary
Using a two-stage FCF DCF with 13% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $130.49 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