MWA
Mueller Water Products, Inc.
$23.94
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 28.1% above fair value
You pay
$23.94
Bear
$15.50
Fair
$18.69
Bull
$21.54
Bear
$15.50
-35.3%
4% stage 1 growth, 11% discount
Fair
$18.69
-21.9%
6% stage 1 growth, 11% discount
Bull
$21.54
-10.0%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
36%
Implied Market Multiple
21.0x
Market is pricing in (growth)
9.7%
vs 6.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$29.75
Divergence from AlphaVal
37%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $18.69 per share.
Warnings
Wall Street's average price target is $29.75 (from 21 analysts). Our estimate is 37% 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