ASTE
Astec Industries, Inc.
$48.58
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 52.3% above fair value
You pay
$48.58
Bear
$25.82
Fair
$31.90
Bull
$37.97
Bear
$25.82
-46.8%
$1.47 × 20x + net cash
Fair
$31.90
-34.3%
$1.47 × 24x + net cash
Bull
$37.97
-21.8%
$1.47 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.47)
Implied Market Multiple
33.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $36.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.90 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.
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