VMC
Vulcan Materials Company
$260.65
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 30.7% above fair value
You pay
$260.65
Bear
$132.22
Fair
$199.45
Bull
$265.99
Bear
$132.22
-49.3%
6% stage 1 growth, 11% discount
Fair
$199.45
-23.5%
10% stage 1 growth, 11% discount
Bull
$265.99
+2.0%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
35.9x
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 $327.00 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $199.45 per share.
Warnings
Wall Street's average price target is $327.00 (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