Is Alcon AG (ALC) overvalued?
On Equity Rank's model estimate, ALC trades close to its fair value (2% above it). Alcon AG (ALC) last closed at $74.94; the multi-method model fair value is $73.18.
| Price | Model fair value | Price vs model |
|---|---|---|
| $74.94 | $73.18 | 2% above |
What the answer rests on
- 3 of 10 valuation methods put ALC's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, ALC's free cash flow would need to grow about 6.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 50.5% a year.
- ALC trades at 58.6 times its last year's earnings, against a median of 30.9 for 37 profitable Medical Devices companies.
- Over the past year the price sat below the model fair value on 88% of trading days. The gap ranged from 18% below to 5% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ALC's fair value · What prices assume · Other companies