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Kontoor Brands, Inc. (KTB) Intrinsic Value

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

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Kontoor Brands, Inc. (KTB)

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Intrinsic Value (DCF)

Current$59.58
→
Intrinsic$177.86
+199%
$118.59$177.86$290.38
Market implies 1% growth for 5 years
DCF analysis suggests KTB could have 199% upside at 21% growth — verify assumptions match your view.
At $60, the market prices in only 1% growth — below historical 21%, suggesting low expectations.
Range: Bear $119 → Bull $290. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →17%19%21%23%
8%$219$238$258$279
10%$151$164$178$192
12%$114$123$134$145
14%$90$98$106$114

Bull Case

  • Bull case ($290) offers 387% upside at 25% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (21%)

Bear Case

  • Bear case ($119) with 17% growth, 12% discount rate
  • Using 21% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$418.34M
Year 2$505.65M
Year 3$611.18M
Year 4$738.74M
Year 5$892.92M
Terminal$13.14B

📐 Model Inputs

Growth Rate20.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$346.11MTTM 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 KTB stock undervalued or overvalued?
🟢 UNDERVALUED

KTB trades at $59.58 vs. our DCF-derived intrinsic value of $171.79, implying +177% upside. At a 10.0% WACC and 20.9% projected FCF growth, the market appears to be underpricing the present value of KTB's future cash flows. The bear case ($109.88) still suggests upside, providing margin of safety.

What is KTB's intrinsic value?

Using a 5-year DCF model: Base FCF of $346M, projected at 20.9% 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 $457M net debt and dividing by 0.06B shares: Bear $109.88 | Base $171.79 | Bull $262.95. Current price $59.58 implies +177% to base case.

How is KTB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.9% 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 ($10.13B).

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: 29.3x.