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Brady Corporation (BRC) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Brady Corporation (BRC)

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Intrinsic Value (DCF)

Current$84.00
→
Intrinsic$71.96
-14%
$49.23$71.96$115.15
Market implies 17% growth for 5 years
BRC appears fairly valued — current price aligns with our DCF estimate.
At $84, the market prices in continued high-teens cash flow growth (17%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $49 → Bull $115. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →9%11%13%15%
8%$86$94$102$111
10%$61$66$72$78
12%$47$51$55$60
14%$38$42$45$48

Bull Case

  • Bull case ($115) offers 37% upside at 16% growth, 9% discount
  • Conservative 13% growth assumption is achievable based on track record

Bear Case

  • Bear case ($49) implies 41% downside at 11% growth, 12% discount
  • Price reflects 17% growth expectations vs 13% historical — high bar to clear
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5-Year Free Cash Flow Projection

Year 1$173.88M
Year 2$196.81M
Year 3$222.77M
Year 4$252.14M
Year 5$285.40M
Terminal$4.20B

📐 Model Inputs

Growth Rate13.2%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$153.62MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is BRC stock undervalued or overvalued?
🟡 FAIRLY VALUED

BRC trades at $84.00, within 10% of our $71.96 intrinsic value estimate. At 10.0% WACC and 13.2% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $49.94 (bear) to $102.77 (bull).

What is BRC's intrinsic value?

Using a 5-year DCF model: Base FCF of $154M, projected at 13.2% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-16M net debt and dividing by 0.05B shares: Bear $49.94 | Base $71.96 | Bull $102.77. Current price $84.00 implies -11% to base case.

How is BRC's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 13.2% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($3.45B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 22.4x.