HWM
Howmet Aerospace Inc.
$228.36
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 218.5% above fair value
You pay
$228.36
Bear
$52.82
Fair
$71.70
Bull
$89.96
Bear
$52.82
-76.9%
6% stage 1 growth, 11% discount
Fair
$71.70
-68.6%
9% stage 1 growth, 11% discount
Bull
$89.96
-60.6%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
62.5x
Market is pricing in (growth)
24.1%
vs 9.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$331.10
Divergence from AlphaVal
78%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $71.70 per share.
Warnings
Wall Street's average price target is $331.10 (from 25 analysts). Our estimate is 78% 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