Church & Dwight Co., Inc. (CHD) Intrinsic Value

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

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Church & Dwight Co., Inc. (CHD)

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Intrinsic Value (DCF)

Current$90.43
Intrinsic$65.97
-27%
$43.30$65.97$109.07
Market implies 15% growth for 5 years
CHD trades at a premium to our conservative estimate — investors expect above-average performance.
At $90, the market prices in continued high-teens cash flow growth (15%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $43 → Bull $109. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$79$87$95$104
10%$55$60$66$72
12%$41$45$50$54
14%$33$36$39$43

Bull Case

  • Bull case ($109) offers 21% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($43) implies 52% downside at 6% growth, 12% discount
  • Price reflects 15% growth expectations vs 8% historical — high bar to clear
  • Trading 27% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$1.05B
Year 2$1.14B
Year 3$1.23B
Year 4$1.33B
Year 5$1.43B
Terminal$21.11B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$976.40MTTM 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.

Frequently Asked Questions

Is CHD stock undervalued or overvalued?
🔴 OVERVALUED

CHD trades at $90.43 vs. our DCF-derived intrinsic value of $65.97, implying -23% downside. Using a 10.0% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($92.44) suggests limited upside.

What is CHD's intrinsic value?

Using a 5-year DCF model: Base FCF of $976M, projected at 8.0% 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 $1.44B net debt and dividing by 0.25B shares: Bear $46.18 | Base $65.97 | Bull $92.44. Current price $90.43 implies -23% to base case.

How is CHD's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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 ($17.73B).

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: 18.2x.