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Teledyne Technologies Incorporated (TDY) Intrinsic Value

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

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Teledyne Technologies Incorporated (TDY)

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Intrinsic Value (DCF)

Current$569.72
→
Intrinsic$636.63
+12%
$419.49$636.63$1,048.88
Market implies 17% growth for 5 years
TDY appears fairly valued — current price aligns with our DCF estimate.
At $570, the market prices in continued high-teens cash flow growth (17%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $419 → Bull $1049. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →16%18%20%22%
8%$786$855$929$1008
10%$539$586$637$690
12%$402$437$475$515
14%$316$343$373$404

Bull Case

  • Bull case ($1049) offers 84% upside at 24% growth, 9% discount
  • 11% margin of safety vs. base case estimate
  • Market-implied growth (17%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($419) implies 26% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.33B
Year 2$1.60B
Year 3$1.91B
Year 4$2.30B
Year 5$2.76B
Terminal$40.58B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.11BTTM 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 TDY stock undervalued or overvalued?
🟢 UNDERVALUED

TDY trades at $569.72 vs. our DCF-derived intrinsic value of $636.63, implying +20% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of TDY's future cash flows. The bear case ($402.10) still suggests upside, providing margin of safety.

What is TDY's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.11B, projected at 20.0% 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 $2.14B net debt and dividing by 0.05B shares: Bear $402.10 | Base $636.63 | Bull $981.99. Current price $569.72 implies +20% to base case.

How is TDY's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% 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 ($32.44B).

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.