PH
Parker-Hannifin Corporation
$963.33
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 40.5% above fair value
You pay
$963.33
Bear
$465.81
Fair
$685.70
Bull
$907.90
Bear
$465.81
-51.6%
7% stage 1 growth, 11% discount
Fair
$685.70
-28.8%
11% stage 1 growth, 11% discount
Bull
$907.90
-5.8%
14% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
40.5x
Market is pricing in (growth)
18.4%
vs 11.1% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $1057.42 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $685.70 per share.
Warnings
Wall Street's average price target is $1057.42 (from 38 analysts). Our estimate is 50% 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