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Allegion plc (ALLE)
Intrinsic Value (DCF)
Current$163.49
→
Intrinsic$111.68
-32%
$70.40$111.68$190.14
Market implies 18% growth for 5 years
Current price reflects execution expectations above 10% growth — not unreasonable for quality businesses.
At $163, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $70 → Bull $190. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 6% | 8% | 10% | 12% |
|---|---|---|---|---|
| 8% | $137 | $151 | $166 | $182 |
| 10% | $92 | $101 | $112 | $123 |
| 12% | $67 | $74 | $82 | $90 |
| 14% | $51 | $57 | $63 | $69 |
Bull Case
- Bull case ($190) offers 16% upside at 12% growth, 9% discount
- Conservative 10% growth assumption is achievable based on track record
Bear Case
- Bear case ($70) implies 57% downside at 8% growth, 12% discount
- Price reflects 18% growth expectations vs 10% historical — high bar to clear
- Trading 32% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$640.43M
Year 2$703.63M
Year 3$773.07M
Year 4$849.36M
Year 5$933.19M
Terminal$13.73B
📐 Model Inputs
Growth Rate9.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$582.90MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.