As of June 9, 2025, Cooper Tire & Rubber Co's estimated intrinsic value ranges from $39.28 to $56.80 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $56.80 | -5.6% |
| Discounted Cash Flow (5Y) | $49.48 | -17.8% |
| Dividend Discount Model (Multi-Stage) | $42.01 | -30.2% |
| Dividend Discount Model (Stable) | $53.12 | -11.7% |
| Earnings Power Value | $39.28 | -34.7% |
Is Cooper Tire & Rubber Co (CTB) undervalued or overvalued?
With the current market price at $60.17, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Cooper Tire & Rubber Co's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.49 | 0.69 |
| Cost of equity | 5.2% | 7.8% |
| Cost of debt | 4.0% | 9.7% |
| Tax rate | 26.7% | 29.4% |
| Debt/Equity ratio | 0.12 | 0.12 |
| After-tax WACC | 5.0% | 7.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $49 | $2,374M | 76.4% |
| 10-Year Growth | $57 | $2,744M | 59.4% |
| 5-Year EBITDA | $49 | $2,343M | 76.1% |
| 10-Year EBITDA | $55 | $2,658M | 58.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $113M |
| Discount Rate (WACC) | 7.7% - 5.0% |
| Enterprise Value | $1,463M - $2,256M |
| Net Debt | $(126)M |
| Equity Value | $1,588M - $2,381M |
| Outstanding Shares | 51M |
| Fair Value | $31 - $47 |
| Selected Fair Value | $39.28 |
| Metric | Value |
|---|---|
| Market Capitalization | $3040M |
| Enterprise Value | $2914M |
| Trailing P/E | 17.22 |
| Forward P/E | 20.69 |
| Trailing EV/EBITDA | 5.45 |
| Current Dividend Yield | 69.41% |
| Dividend Growth Rate (5Y) | -1.92% |
| Debt-to-Equity Ratio | 0.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $17.04 |
| Discounted Cash Flow (5Y) | 25% | $12.37 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.40 |
| Dividend Discount Model (Stable) | 15% | $7.97 |
| Earnings Power Value | 10% | $3.93 |
| Weighted Average | 100% | $49.71 |
Based on our comprehensive valuation analysis, Cooper Tire & Rubber Co's weighted average intrinsic value is $49.71, which is approximately 17.4% below the current market price of $60.17.
Key investment considerations:
Given these factors, we believe Cooper Tire & Rubber Co is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.