WAB
Westinghouse Air Brake Technologies Corporation
$256.41
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 34.5% above fair value
You pay
$256.41
Bear
$137.30
Fair
$190.58
Bull
$241.51
Bear
$137.30
-46.5%
5% stage 1 growth, 11% discount
Fair
$190.58
-25.7%
9% stage 1 growth, 11% discount
Bull
$241.51
-5.8%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
33.5x
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 $305.00 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $190.58 per share.
Warnings
Wall Street's average price target is $305.00 (from 34 analysts). Our estimate is 54% 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