KBR
KBR, Inc.
$35.18
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 37.7% below fair value
You pay
$35.18
Bear
$43.70
Fair
$56.51
Bull
$67.88
Bear
$43.70
+24.2%
4% stage 1 growth, 11% discount
Fair
$56.51
+60.6%
6% stage 1 growth, 11% discount
Bull
$67.88
+93.0%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
36%
Implied Market Multiple
11.8x
Market is pricing in (growth)
1.8%
vs 6.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$45.50
Divergence from AlphaVal
24%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $56.51 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