RPM
RPM International Inc.
$100.90
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 58.3% above fair value
You pay
$100.90
Bear
$48.61
Fair
$63.73
Bull
$77.09
Bear
$48.61
-51.8%
4% stage 1 growth, 11% discount
Fair
$63.73
-36.8%
6% stage 1 growth, 11% discount
Bull
$77.09
-23.6%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
30.1x
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 $122.67 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $63.73 per share.
Warnings
Wall Street's average price target is $122.67 (from 22 analysts). Our estimate is 64% 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