OTTR
Otter Tail Corporation
$90.84
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 69.7% above fair value
You pay
$90.84
Bear
$44.91
Fair
$53.53
Bull
$61.30
Bear
$44.91
-50.6%
3% stage 1 growth, 11% discount
Fair
$53.53
-41.1%
5% stage 1 growth, 11% discount
Bull
$61.30
-32.5%
6% stage 1 growth, 11% discount
Adjust Assumptions
4.8%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
22.6x
Market is pricing in (growth)
10.6%
vs 4.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$81.00
Divergence from AlphaVal
34%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $53.53 per share.
Warnings
Wall Street's average price target is $81.00 (from 7 analysts). Our estimate is 34% 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