RBC
RBC Bearings Incorporated
$590.14
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 103.2% above fair value
You pay
$590.14
Bear
$192.22
Fair
$290.38
Bull
$391.19
Bear
$192.22
-67.4%
7% stage 1 growth, 12% discount
Fair
$290.38
-50.8%
12% stage 1 growth, 12% discount
Bull
$391.19
-33.7%
16% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
61.9x
Market is pricing in (growth)
26.2%
vs 11.9% 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 $598.00 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $290.38 per share.
Warnings
Wall Street's average price target is $598.00 (from 26 analysts). Our estimate is 69% 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