AIN
Albany International Corp.
$75.91
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 24.2% above fair value
You pay
$75.91
Bear
$48.25
Fair
$61.11
Bull
$73.98
Bear
$48.25
-36.4%
$3.22 × 18x + net cash
Fair
$61.11
-19.5%
$3.22 × 22x + net cash
Bull
$73.98
-2.5%
$3.22 × 26x + net cash
Key Value Driver
Through-cycle normalized EPS ($3.22)
Implied Market Multiple
23.6x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $61.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $61.11 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Price-to-book value of 4.0x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
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