HWM
Howmet Aerospace Inc.
$286.84
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 300.0% above fair value
You pay
$286.84
Bear
$52.82
Fair
$71.70
Bull
$89.96
Bear
$52.82
-81.6%
6% stage 1 growth, 11% discount
Fair
$71.70
-75.0%
9% stage 1 growth, 11% discount
Bull
$89.96
-68.6%
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
78.0x
Market is pricing in (growth)
27.1%
vs 9.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$308.83
Divergence from AlphaVal
77%
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 $308.83 (from 25 analysts). Our estimate is 77% 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