GE
GE Aerospace
$353.73
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 61.4% above fair value
You pay
$353.73
Bear
$152.35
Fair
$219.20
Bull
$287.61
Bear
$152.35
-56.9%
7% stage 1 growth, 12% discount
Fair
$219.20
-38.0%
12% stage 1 growth, 12% discount
Bull
$287.61
-18.7%
15% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
52.0x
Market is pricing in (growth)
23.8%
vs 11.8% base
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 $400.14 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $219.20 per share.
Warnings
Wall Street's average price target is $400.14 (from 35 analysts). Our estimate is 65% 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