WS
Worthington Steel, Inc.
$39.68
Other Commodity Producers
80%
FCF at Commodity Price Scenarios
Strong
·
Conviction
Overvalued
Trading 260.5% above fair value
You pay
$39.68
Bear
$3.83
Fair
$11.01
Bull
$20.14
Bear
$3.83
-90.3%
FCF −30% × 8x
Fair
$11.01
-72.3%
Current FCF × 10x
Bull
$20.14
-49.3%
FCF +30% × 12x
Adjust Assumptions
0.0%
10.0x
Key Value Driver
Commodity price outlook and production volume
Implied Market Multiple
27.6x
Summary
At current commodity prices with a 10x EV/FCF multiple, intrinsic value is $11.01 per share. Range: $3.83 to $20.14.
Warnings
Demand trends (construction, electric vehicles, food production) matter more than supply headlines. Focus on who's buying the commodity and why.
Mines and reserves eventually run out. Standard models undercount this risk — the company must keep finding or buying new resources just to maintain its value.
Key Risks
- AISC vs. cash cost distinction: always use AISC for breakeven analysis
- Single-asset companies carry significantly higher risk — widen scenario range
- Mine permitting takes 10-20 years — growth optionality often priced in optimistically