SXC
SunCoke Energy, Inc.
$8.92
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 45.9% below fair value
You pay
$8.92
Bear
$12.51
Fair
$16.50
Bull
$20.09
Bear
$12.51
+40.2%
4% stage 1 growth, 11% discount
Fair
$16.50
+85.0%
7% stage 1 growth, 11% discount
Bull
$20.09
+125.2%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
10.3x
Market is pricing in (growth)
-0.1%
vs 6.6% 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 $9.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $16.50 per share.
Warnings
Wall Street's average price target is $9.00 (from 17 analysts). Our estimate is 111% 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