MWA
Mueller Water Products, Inc.
$22.46
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 40.2% above fair value
You pay
$22.46
Bear
$14.64
Fair
$16.02
Bull
$17.59
Bear
$14.64
-34.8%
3% stage 1 growth, 11% discount
Fair
$16.02
-28.7%
4% stage 1 growth, 11% discount
Bull
$17.59
-21.7%
5% stage 1 growth, 11% discount
Adjust Assumptions
4.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
34%
Implied Market Multiple
19.7x
Market is pricing in (growth)
8.8%
vs 4.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$26.25
Divergence from AlphaVal
39%
Summary
Using a two-stage FCF DCF with 4% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $16.02 per share.
Warnings
Wall Street's average price target is $26.25 (from 21 analysts). Our estimate is 39% 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