VMC
Vulcan Materials Company
$279.29
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 42.3% above fair value
You pay
$279.29
Bear
$131.20
Fair
$196.25
Bull
$260.18
Bear
$131.20
-53.0%
6% stage 1 growth, 11% discount
Fair
$196.25
-29.7%
10% stage 1 growth, 11% discount
Bull
$260.18
-6.8%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
38.1x
Market is pricing in (growth)
17.6%
vs 10.1% 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 $324.55 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $196.25 per share.
Warnings
Wall Street's average price target is $324.55 (from 36 analysts). Our estimate is 56% 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