GE
GE Aerospace
$302.84
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 41.9% above fair value
You pay
$302.84
Bear
$148.36
Fair
$213.45
Bull
$280.08
Bear
$148.36
-51.0%
7% stage 1 growth, 12% discount
Fair
$213.45
-29.5%
12% stage 1 growth, 12% discount
Bull
$280.08
-7.5%
15% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
44.7x
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 $381.00 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $213.45 per share.
Warnings
Wall Street's average price target is $381.00 (from 34 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