APOG
Apogee Enterprises, Inc.
$40.59
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 42.0% below fair value
You pay
$40.59
Bear
$54.46
Fair
$70.02
Bull
$85.58
Bear
$54.46
+34.2%
$3.89 × 14x
Fair
$70.02
+72.5%
$3.89 × 18x
Bull
$85.58
+110.8%
$3.89 × 22x
Adjust Assumptions
18.0x
3.89$
Key Value Driver
Through-cycle normalized EPS ($3.89)
Implied Market Multiple
10.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$61.33
Divergence from AlphaVal
14%
Summary
Using 7-year normalized EPS of $3.89 at a 18x cycle multiple, the base-case value is $70.02 per share. P/TBV cross-check: 5.2x.
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 5.2x 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