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Donaldson Company, Inc. (DCI)
Intrinsic Value (DCF)
Current$100.73
→
Intrinsic$48.43
-52%
$31.68$48.43$80.27
Market implies 26% growth for 5 years
Current price reflects execution expectations above 9% growth — not unreasonable for quality businesses.
At $101, the market prices in continued strong cash flow growth (26%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $32 → Bull $80. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 5% | 7% | 9% | 11% |
|---|---|---|---|---|
| 8% | $58 | $64 | $70 | $77 |
| 10% | $40 | $44 | $48 | $53 |
| 12% | $30 | $33 | $36 | $40 |
| 14% | $24 | $26 | $29 | $31 |
Bull Case
- Bull case ($80) with 11% growth, 9% discount rate
- Conservative 9% growth assumption is achievable based on track record
Bear Case
- Bear case ($32) implies 69% downside at 7% growth, 12% discount
- Price reflects 26% growth expectations vs 9% historical — high bar to clear
- Trading 52% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$369.83M
Year 2$402.40M
Year 3$437.84M
Year 4$476.40M
Year 5$518.35M
Terminal$7.63B
📐 Model Inputs
Growth Rate8.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$339.90MTTM 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.