APOG
Apogee Enterprises, Inc.
$35.88
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 41.1% below fair value
You pay
$35.88
Bear
$44.67
Fair
$60.87
Bull
$77.07
Bear
$44.67
+24.5%
$3.89 × 14x + net cash
Fair
$60.87
+69.6%
$3.89 × 18x + net cash
Bull
$77.07
+114.8%
$3.89 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($3.89)
Implied Market Multiple
9.2x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $70.50 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $60.87 per share.
Warnings
Price-to-book value of 4.7x 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