SYK
Stryker Corporation
$316.48
Platform & Compounding FCF
65%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 9.5% above fair value
You pay
$316.48
Bear
$192.78
Fair
$288.92
Bull
$387.89
Bear
$192.78
-39.1%
7% stage 1 growth, 11% discount
Fair
$288.92
-8.7%
12% stage 1 growth, 11% discount
Bull
$387.89
+22.6%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
32.2x
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 $385.83 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $288.92 per share.
Warnings
Wall Street's average price target is $385.83 (from 50 analysts). Our estimate is 39% 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