ITT
ITT Inc.
$195.76
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 44.1% below fair value
You pay
$195.76
Bear
$171.16
Fair
$350.17
Bull
$599.89
Bear
$171.16
-12.6%
15% stage 1 growth, 11% discount
Fair
$350.17
+78.9%
25% stage 1 growth, 11% discount
Bull
$599.89
+206.4%
32% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (25% base case)
Terminal Value % of EV
49%
Implied Market Multiple
32.1x
Market is pricing in (growth)
15.3%
vs 24.6% 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 $241.29 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $350.17 per share.
Warnings
Wall Street's average price target is $241.29 (from 23 analysts). Our estimate is 60% 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