HWM
Howmet Aerospace Inc.
$268.57
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 117.8% above fair value
You pay
$268.57
Bear
$90.62
Fair
$123.32
Bull
$154.95
Bear
$90.62
-66.3%
6% stage 1 growth, 11% discount
Fair
$123.32
-54.1%
9% stage 1 growth, 11% discount
Bull
$154.95
-42.3%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
79.8x
Market is pricing in (growth)
27.4%
vs 9.4% 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 $297.36 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $123.32 per share.
Warnings
Wall Street's average price target is $297.36 (from 24 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