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Silgan Holdings Inc. (SLGN) Intrinsic Value

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

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Silgan Holdings Inc. (SLGN)

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Intrinsic Value (DCF)

Current$42.75
→
Intrinsic$53.88
+26%
$26.37$53.88$106.15
Market implies 7% growth for 5 years
SLGN shows 26% potential upside using 11% growth — reasonable if fundamentals hold.
At $43, the market prices in only 7% growth — below historical 11%, suggesting low expectations.
Range: Bear $26 → Bull $106. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →7%9%11%13%
8%$71$80$90$101
10%$41$47$54$61
12%$24$29$34$39
14%$13$17$21$26

Bull Case

  • Bull case ($106) offers 148% upside at 13% growth, 9% discount
  • 21% margin of safety vs. base case estimate
  • Market-implied growth (7%) ≤ historical CAGR (11%)

Bear Case

  • Bear case ($26) implies 38% downside at 9% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$508.12M
Year 2$562.38M
Year 3$622.44M
Year 4$688.92M
Year 5$762.49M
Terminal$11.22B

📐 Model Inputs

Growth Rate10.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$459.09MTTM 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 SLGN stock undervalued or overvalued?
🟢 UNDERVALUED

SLGN trades at $42.75 vs. our DCF-derived intrinsic value of $53.88, implying +29% upside. At a 10.0% WACC and 10.7% projected FCF growth, the market appears to be underpricing the present value of SLGN's future cash flows. The bear case ($28.47) still suggests upside, providing margin of safety.

What is SLGN's intrinsic value?

Using a 5-year DCF model: Base FCF of $459M, projected at 10.7% 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 $3.53B net debt and dividing by 0.11B shares: Bear $28.47 | Base $53.88 | Bull $88.69. Current price $42.75 implies +29% to base case.

How is SLGN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 10.7% 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 ($9.30B).

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: 20.3x.