AMBP
Ardagh Metal Packaging S.A.
$4.63
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 60.7% above fair value
You pay
$4.63
Bear
$1.77
Fair
$2.88
Bull
$3.98
Bear
$1.77
-61.8%
$0.39 × 7x + net cash
Fair
$2.88
-37.8%
$0.39 × 10x + net cash
Bull
$3.98
-14.0%
$0.39 × 12x + net cash
Key Value Driver
Through-cycle normalized EPS ($0.39)
Implied Market Multiple
11.9x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $4.25 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $2.88 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.
Wall Street's average price target is $4.25 (from 6 analysts). Our estimate is 40% below 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