RPM
RPM International Inc.
$101.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 54.9% above fair value
You pay
$101.63
Bear
$50.04
Fair
$65.62
Bull
$79.37
Bear
$50.04
-50.8%
4% stage 1 growth, 11% discount
Fair
$65.62
-35.4%
6% stage 1 growth, 11% discount
Bull
$79.37
-21.9%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
30.2x
Market is pricing in (growth)
14.5%
vs 6.0% 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 $129.75 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $65.62 per share.
Warnings
Wall Street's average price target is $129.75 (from 22 analysts). Our estimate is 66% 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