Editing Malibu Boats, Inc. (section)

== '''DCF Valuation''' ==
Our $60.26 price target represents our DCF valuation on Malibu Boats over the next 2 years. A discount rate of 9.76% (2.36% quarterly) and an exit multiple of 12.17x EV/EBITDA were used. Key assumptions used in formulating the three different cases can be seen below: 

{| class="wikitable"
|
|'''Bull case'''
|'''Base case'''
|'''Bear case'''
|-
|'''Rationale''' 
|On the 10th of August, the awaited CPI report is unveiled, bringing a pleasant  surprise with better-than-expected news. The economic outlook takes a  positive turn as it is revealed that the recession has been avoided. This  encouraging development prompts a much-needed shift in the Federal Reserve's  strategy, leading them to pivot towards rate cuts by the end of 2023.
|The Federal Reserve is poised to implement either one or two additional rate  hikes, while plans for interest rate reductions are anticipated by mid-2024.  This prospect leaves investors in a state of uncertainty.
|The US economy enters a recession, leading to a significant decline in consumer  demand for leisure items. As a result, the revenues of Malibu Boats plummet,  and investors' sentiment worsens.
|-
|'''Target price'''
|$65.79
|$60.26
|$55.21
|}