KBR
KBR, Inc.
$36.18
Platform & Compounding FCF
70%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 1.6% above fair value
You pay
$36.18
Bear
$28.39
Fair
$35.60
Bull
$42.01
Bear
$28.39
-21.5%
3% stage 1 growth, 11% discount
Fair
$35.60
-1.6%
5% stage 1 growth, 11% discount
Bull
$42.01
+16.1%
6% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
15.0x
Market is pricing in (growth)
5.1%
vs 4.9% 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 $36.00 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $35.60 per share.
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