AGCO
AGCO Corporation
$105.22
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 63.0% below fair value
You pay
$105.22
Bear
$237.00
Fair
$284.40
Bull
$331.80
Bear
$237.00
+125.2%
$11.85 × 20x
Fair
$284.40
+170.3%
$11.85 × 24x
Bull
$331.80
+215.3%
$11.85 × 28x
Adjust Assumptions
24.0x
11.85$
Key Value Driver
Through-cycle normalized EPS ($11.85)
Implied Market Multiple
8.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$125.13
Divergence from AlphaVal
127%
Summary
Using 7-year normalized EPS of $11.85 at a 24x cycle multiple, the base-case value is $284.40 per share. P/TBV cross-check: 4.3x.
Warnings
Price-to-book value of 4.3x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $125.13 (from 30 analysts). Our estimate is 127% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing