As of May 27, 2025, Regal Beloit Corp's estimated intrinsic value ranges from $120.59 to $410.89 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $410.89 | +14.0% |
| Discounted Cash Flow (5Y) | $313.98 | -12.9% |
| Dividend Discount Model (Multi-Stage) | $227.03 | -37.0% |
| Dividend Discount Model (Stable) | $182.19 | -49.5% |
| Earnings Power Value | $120.59 | -66.5% |
Is Regal Beloit Corp (RBC) undervalued or overvalued?
With the current market price at $360.50, the stock appears to be significantly 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 Regal Beloit Corp'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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.77 | 0.99 |
| Cost of equity | 7.4% | 10.4% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 20.5% | 20.7% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 7.1% | 9.8% |
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 | $314 | $10,761M | 81.8% |
| 10-Year Growth | $411 | $13,808M | 69.5% |
| 5-Year EBITDA | $181 | $6,566M | 70.3% |
| 10-Year EBITDA | $267 | $9,293M | 54.7% |
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 | $384M |
| Discount Rate (WACC) | 9.8% - 7.1% |
| Enterprise Value | $3,939M - $5,422M |
| Net Debt | $889M |
| Equity Value | $3,050M - $4,533M |
| Outstanding Shares | 31M |
| Fair Value | $97 - $144 |
| Selected Fair Value | $120.59 |
| Metric | Value |
|---|---|
| Market Capitalization | $11334M |
| Enterprise Value | $12223M |
| Trailing P/E | 46.04 |
| Forward P/E | 36.51 |
| Trailing EV/EBITDA | 8.60 |
| Current Dividend Yield | 15.18% |
| Dividend Growth Rate (5Y) | -16.49% |
| Debt-to-Equity Ratio | 0.09 |
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% | $123.27 |
| Discounted Cash Flow (5Y) | 25% | $78.50 |
| Dividend Discount Model (Multi-Stage) | 20% | $45.41 |
| Dividend Discount Model (Stable) | 15% | $27.33 |
| Earnings Power Value | 10% | $12.06 |
| Weighted Average | 100% | $286.56 |
Based on our comprehensive valuation analysis, Regal Beloit Corp's weighted average intrinsic value is $286.56, which is approximately 20.5% below the current market price of $360.50.
Key investment considerations:
Given these factors, we believe Regal Beloit Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.