ESI
Element Solutions Inc
$37.20
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 112.6% above fair value
You pay
$37.20
Bear
$13.69
Fair
$17.50
Bull
$20.92
Bear
$13.69
-63.2%
4% stage 1 growth, 11% discount
Fair
$17.50
-53.0%
7% stage 1 growth, 11% discount
Bull
$20.92
-43.8%
9% stage 1 growth, 11% discount
Adjust Assumptions
6.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
32.0x
Market is pricing in (growth)
15.2%
vs 6.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (35 analysts)
$47.90
Divergence from AlphaVal
63%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $17.50 per share.
Warnings
Wall Street's average price target is $47.90 (from 35 analysts). Our estimate is 63% 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