RSG
Republic Services, Inc.
$216.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 28.5% above fair value
You pay
$216.63
Bear
$134.78
Fair
$168.56
Bull
$199.65
Bear
$134.78
-37.8%
5% stage 1 growth, 11% discount
Fair
$168.56
-22.2%
8% stage 1 growth, 11% discount
Bull
$199.65
-7.8%
10% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
27.8x
Market is pricing in (growth)
13.4%
vs 7.5% 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 $235.60 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $168.56 per share.
Warnings
Wall Street's average price target is $235.60 (from 35 analysts). Our estimate is 41% 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