INCY
Incyte Corporation
$107.53
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 34.6% below fair value
You pay
$107.53
Bear
$113.23
Fair
$164.33
Bull
$219.90
Bear
$113.23
+5.3%
8% stage 1 growth, 11% discount
Fair
$164.33
+52.8%
14% stage 1 growth, 11% discount
Bull
$219.90
+104.5%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
15.4x
Market is pricing in (growth)
5.5%
vs 14.0% 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 $108.92 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $164.33 per share.
Warnings
Wall Street's average price target is $108.92 (from 44 analysts). Our estimate is 73% above 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