PAG
Penske Automotive Group, Inc.
$219.77
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 326.8% above fair value
You pay
$219.77
Bear
$27.88
Fair
$51.49
Bull
$72.46
Bear
$27.88
-87.3%
3% stage 1 growth, 11% discount
Fair
$51.49
-76.6%
5% stage 1 growth, 11% discount
Bull
$72.46
-67.0%
6% stage 1 growth, 11% discount
Adjust Assumptions
4.9%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
28.2x
Market is pricing in (growth)
13.6%
vs 4.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$208.75
Divergence from AlphaVal
75%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $51.49 per share.
Warnings
Wall Street's average price target is $208.75 (from 27 analysts). Our estimate is 75% 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