RXN
Rexnord Corporation
$64.95
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.3% below fair value
You pay
$64.95
Bear
$39.19
Fair
$71.62
Bull
$112.09
Bear
$39.19
-39.7%
12% stage 1 growth, 12% discount
Fair
$71.62
+10.3%
20% stage 1 growth, 12% discount
Bull
$112.09
+72.6%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
35.6x
Market is pricing in (growth)
18.7%
vs 20.0% base
Summary
Using a two-stage FCF DCF with 20% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $71.62 per share.
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