WAB
Westinghouse Air Brake Technologies Corporation
$302.50
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 53.2% above fair value
You pay
$302.50
Bear
$142.27
Fair
$197.48
Bull
$250.25
Bear
$142.27
-53.0%
5% stage 1 growth, 11% discount
Fair
$197.48
-34.7%
9% stage 1 growth, 11% discount
Bull
$250.25
-17.3%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
38.8x
Market is pricing in (growth)
17.8%
vs 9.0% 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 $326.50 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $197.48 per share.
Warnings
Wall Street's average price target is $326.50 (from 34 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