As of June 2, 2025, Snap-On Inc's estimated intrinsic value ranges from $236.91 to $420.15 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $354.43 | +10.5% |
| Discounted Cash Flow (5Y) | $325.94 | +1.6% |
| Dividend Discount Model (Multi-Stage) | $255.42 | -20.4% |
| Dividend Discount Model (Stable) | $236.91 | -26.1% |
| Earnings Power Value | $420.15 | +31.0% |
Is Snap-On Inc (SNA) undervalued or overvalued?
With the current market price at $320.75, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Snap-On Inc'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 | 0.94 | 1.1 |
| Cost of equity | 8.2% | 11.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 22.3% | 22.5% |
| Debt/Equity ratio | 0.07 | 0.07 |
| After-tax WACC | 7.9% | 10.5% |
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 | $326 | $16,814M | 72.0% |
| 10-Year Growth | $354 | $18,304M | 52.2% |
| 5-Year EBITDA | $368 | $19,007M | 75.2% |
| 10-Year EBITDA | $399 | $20,646M | 57.6% |
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 | $1,957M |
| Discount Rate (WACC) | 10.5% - 7.9% |
| Enterprise Value | $18,596M - $24,884M |
| Net Debt | $(230)M |
| Equity Value | $18,825M - $25,114M |
| Outstanding Shares | 52M |
| Fair Value | $360 - $480 |
| Selected Fair Value | $420.15 |
| Metric | Value |
|---|---|
| Market Capitalization | $16772M |
| Enterprise Value | $16543M |
| Trailing P/E | 16.43 |
| Forward P/E | 15.66 |
| Trailing EV/EBITDA | 11.80 |
| Current Dividend Yield | 250.66% |
| Dividend Growth Rate (5Y) | 13.68% |
| Debt-to-Equity Ratio | 0.07 |
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% | $106.33 |
| Discounted Cash Flow (5Y) | 25% | $81.48 |
| Dividend Discount Model (Multi-Stage) | 20% | $51.08 |
| Dividend Discount Model (Stable) | 15% | $35.54 |
| Earnings Power Value | 10% | $42.01 |
| Weighted Average | 100% | $316.45 |
Based on our comprehensive valuation analysis, Snap-On Inc's weighted average intrinsic value is $316.45, which is approximately 1.3% below the current market price of $320.75.
Key investment considerations:
Given these factors, we believe Snap-On Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.