SFL
SFL Corporation Ltd
$11.44
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.7% below fair value
You pay
$11.44
Bear
$8.21
Fair
$17.25
Bull
$26.16
Bear
$8.21
-28.2%
6% stage 1 growth, 11% discount
Fair
$17.25
+50.8%
10% stage 1 growth, 11% discount
Bull
$26.16
+128.6%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
17.9x
Market is pricing in (growth)
7.5%
vs 10.2% 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 $14.50 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $17.25 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