RSG
Republic Services, Inc.
$208.93
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 22.1% above fair value
You pay
$208.93
Bear
$136.33
Fair
$171.08
Bull
$203.16
Bear
$136.33
-34.7%
5% stage 1 growth, 11% discount
Fair
$171.08
-18.1%
8% stage 1 growth, 11% discount
Bull
$203.16
-2.8%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
26.8x
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 $241.25 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $171.08 per share.
Warnings
Wall Street's average price target is $241.25 (from 35 analysts). Our estimate is 42% 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