PH
Parker-Hannifin Corporation
$866.96
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 15.6% above fair value
You pay
$866.96
Bear
$478.43
Fair
$749.78
Bull
$1,038.14
Bear
$478.43
-44.8%
8% stage 1 growth, 11% discount
Fair
$749.78
-13.5%
13% stage 1 growth, 11% discount
Bull
$1,038.14
+19.7%
17% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
41%
Implied Market Multiple
36.8x
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 $1047.00 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $749.78 per share.
Warnings
Wall Street's average price target is $1047.00 (from 38 analysts). Our estimate is 41% 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