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Snap-on Incorporated (SNA) Intrinsic Value

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

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Snap-on Incorporated (SNA)

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Intrinsic Value (DCF)

Current$363.45
→
Intrinsic$502.91
+38%
$343.59$502.91$805.59
Market implies 7% growth for 5 years
DCF analysis suggests SNA could have 38% upside at 15% growth — verify assumptions match your view.
At $363, the market prices in only 7% growth — below historical 15%, suggesting low expectations.
Range: Bear $344 → Bull $806. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →11%13%15%17%
8%$605$658$714$774
10%$428$464$503$544
12%$330$357$386$417
14%$268$289$312$336

Bull Case

  • Bull case ($806) offers 122% upside at 17% growth, 9% discount
  • 28% margin of safety vs. base case estimate
  • Market-implied growth (7%) ≤ historical CAGR (15%)

Bear Case

  • Bear case ($344) implies 5% downside at 12% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.30B
Year 2$1.49B
Year 3$1.70B
Year 4$1.95B
Year 5$2.24B
Terminal$32.90B

📐 Model Inputs

Growth Rate14.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.13BTTM 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 SNA stock undervalued or overvalued?
🟢 UNDERVALUED

SNA trades at $363.45 vs. our DCF-derived intrinsic value of $502.91, implying +41% upside. At a 10.0% WACC and 14.5% projected FCF growth, the market appears to be underpricing the present value of SNA's future cash flows. The bear case ($344.83) still suggests upside, providing margin of safety.

What is SNA's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.13B, projected at 14.5% 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 $-68M net debt and dividing by 0.05B shares: Bear $344.83 | Base $502.91 | Bull $726.50. Current price $363.45 implies +41% to base case.

How is SNA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 14.5% 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 ($26.84B).

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: 23.7x.