RRX
Regal Rexnord Corporation
$200.78
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 37.1% below fair value
You pay
$200.78
Bear
$178.64
Fair
$318.97
Bull
$476.48
Bear
$178.64
-11.0%
9% stage 1 growth, 11% discount
Fair
$318.97
+58.9%
15% stage 1 growth, 11% discount
Bull
$476.48
+137.3%
20% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
43%
Implied Market Multiple
20.7x
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 $228.33 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $318.97 per share.
Warnings
Wall Street's average price target is $228.33 (from 22 analysts). Our estimate is 53% above 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