CTAS
Cintas Corporation
$170.85
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 25.5% above fair value
You pay
$170.85
Bear
$95.34
Fair
$136.11
Bull
$177.29
Bear
$95.34
-44.2%
7% stage 1 growth, 11% discount
Fair
$136.11
-20.3%
11% stage 1 growth, 11% discount
Bull
$177.29
+3.8%
14% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
42.6x
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 $241.00 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $136.11 per share.
Warnings
Wall Street's average price target is $241.00 (from 30 analysts). Our estimate is 62% below 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