Is There An Opportunity With AAR Corp.’s (NYSE:AIR) 28% Undervaluation?

Source: Shutterstock Key Insights The projected fair value for AAR is US$79.08 based on 2 Stage Free Cash Flow to Equity Current share price of US$56.60 suggests AAR is potentially 28% undervalued Analyst price target for AIR is US$57.00 which is 28% below our fair value estimate Today we will run through one way of estimating the intrinsic value of AAR Corp. ( NYSE:AIR ) by taking the expected future cash flows and discounting them to today’s value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Believe it or not, it’s not too difficult to follow, as you’ll see from our example! We generally believe that a company’s value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model . See our latest analysis for AAR The Model We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the […]

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