VVV
Valvoline Inc.
$30.27
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 64.3% below fair value
You pay
$30.27
Bear
$42.98
Fair
$84.90
Bull
$135.93
Bear
$42.98
+42.0%
11% stage 1 growth, 11% discount
Fair
$84.90
+180.5%
19% stage 1 growth, 11% discount
Bull
$135.93
+349.1%
24% stage 1 growth, 11% discount
Adjust Assumptions
18.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
45%
Implied Market Multiple
18.2x
Market is pricing in (growth)
7.7%
vs 18.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$43.75
Divergence from AlphaVal
94%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $84.90 per share.
Warnings
This company spends 15% of revenue on big investments like data centers and infrastructure, mostly for growth. We adjusted the cash flow figure to only subtract the upkeep costs, giving a clearer picture of true profitability.
Wall Street's average price target is $43.75 (from 24 analysts). Our estimate is 94% 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