RBC
RBC Bearings Incorporated
$559.95
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 95.2% above fair value
You pay
$559.95
Bear
$189.87
Fair
$286.83
Bull
$386.41
Bear
$189.87
-66.1%
7% stage 1 growth, 12% discount
Fair
$286.83
-48.8%
12% stage 1 growth, 12% discount
Bull
$386.41
-31.0%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
58.9x
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 $583.80 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $286.83 per share.
Warnings
Wall Street's average price target is $583.80 (from 26 analysts). Our estimate is 68% 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