AN
AutoNation, Inc.
$210.00
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 23.1% below fair value
You pay
$210.00
Bear
$218.41
Fair
$273.02
Bull
$327.62
Bear
$218.41
+4.0%
$19.30 × 12x P/E
Fair
$273.02
+30.0%
$19.30 × 15x P/E
Bull
$327.62
+56.0%
$19.30 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
10.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $234.67 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $273.02 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples