TGM's two-stage DCF values A. O. Smith Corporation (AOS) between $42.74 and $72.03 depending on assumptions, with a base case of $54.85. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (9.8%) reflects its beta.
What would today's price require?
$63.98 is justified only if free cash flow grows about +7.7% a year (fading to 2.5% long-run) at a 9.8% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.9%/yr | 10.8% | $42.74 |
| Base case | 3.9%/yr | 9.8% | $54.85 |
| Optimistic | 6.9%/yr | 8.8% | $72.03 |
| Third-party model estimate (FMP) | independent reference · retrieved Aug 8, 2026 · assumptions not provided | $85.00 | |
The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.
Current Price
$63.98
Market-Implied Growth
+7.7%/yr
vs +4.4% 5Y actual
Model Scenario Range
$42.74 – $72.03
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for AOS (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $509.9M · 0.14B shares · net cash $19.5M
Estimated Fair Value
$54.85
-14.3% vs $63.98
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 3.9%/yr FCF growth and 10-year horizon fixed. Green = above today's $63.98; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 7.8% | $65.72 | $70.28 | $75.69 | $82.22 | $90.25 |
| 8.8% | $56.62 | $59.86 | $63.61 | $68.01 | $73.22 |
| 9.8% | $49.71 | $52.12 | $54.85 | $57.98 | $61.60 |
| 10.8% | $44.30 | $46.14 | $48.20 | $50.53 | $53.16 |
| 11.8% | $39.93 | $41.38 | $42.99 | $44.77 | $46.76 |
