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Masco Corporation (MAS) Intrinsic Value

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

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Masco Corporation (MAS)

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Intrinsic Value (DCF)

Current$70.07
→
Intrinsic$74.35
+6%
$47.07$74.35$126.21
Market implies 10% growth for 5 years
MAS appears fairly valued — current price aligns with our DCF estimate.
At $70, the market prices in 10% annual cash flow growth — a moderate expectation aligned with historical trends (11%).
Range: Bear $47 → Bull $126. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →7%9%11%13%
8%$91$100$110$121
10%$61$68$74$82
12%$45$49$55$60
14%$34$38$42$46

Bull Case

  • Bull case ($126) offers 80% upside at 14% growth, 9% discount
  • 6% margin of safety vs. base case estimate
  • Market-implied growth (10%) ≤ historical CAGR (11%)

Bear Case

  • Bear case ($47) implies 33% downside at 9% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.01B
Year 2$1.12B
Year 3$1.25B
Year 4$1.39B
Year 5$1.55B
Terminal$22.81B

📐 Model Inputs

Growth Rate11.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$907.00MTTM 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 MAS stock undervalued or overvalued?
🟡 FAIRLY VALUED

MAS trades at $70.07, within 10% of our $74.35 intrinsic value estimate. At 10.0% WACC and 11.3% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $48.83 (bear) to $109.51 (bull).

What is MAS's intrinsic value?

Using a 5-year DCF model: Base FCF of $907M, projected at 11.3% 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 $2.58B net debt and dividing by 0.22B shares: Bear $48.83 | Base $74.35 | Bull $109.51. Current price $70.07 implies +13% to base case.

How is MAS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 11.3% 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 ($18.86B).

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: 20.8x.