BLBD
Blue Bird Corporation
$56.29
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 480.8% above fair value
You pay
$56.29
Bear
$7.14
Fair
$9.69
Bull
$12.24
Bear
$7.14
-87.3%
$1.02 × 7x
Fair
$9.69
-82.8%
$1.02 × 10x
Bull
$12.24
-78.3%
$1.02 × 12x
Adjust Assumptions
9.5x
1.02$
Key Value Driver
Through-cycle normalized EPS ($1.02)
Implied Market Multiple
55.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$89.00
Divergence from AlphaVal
89%
Summary
Using 7-year normalized EPS of $1.02 at a 10x cycle multiple, the base-case value is $9.69 per share. P/TBV cross-check: 9.1x.
Warnings
Recent profits ($3.88/share) are 280% above the mid-cycle average ($1.02). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 9.1x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $89.00 (from 12 analysts). Our estimate is 89% 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