CDNL
Cardinal Infrastructure Group Inc.
$45.14
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 63.9% above fair value
You pay
$45.14
Bear
$21.42
Fair
$27.54
Bull
$33.66
Bear
$21.42
-52.5%
$1.53 × 14x
Fair
$27.54
-39.0%
$1.53 × 18x
Bull
$33.66
-25.4%
$1.53 × 22x
Adjust Assumptions
18.0x
1.53$
Key Value Driver
Through-cycle normalized EPS ($1.53)
Implied Market Multiple
29.5x
Summary
Using 2-year normalized EPS of $1.53 at a 18x cycle multiple, the base-case value is $27.54 per share. P/TBV cross-check: 35.5x.
Warnings
Price-to-book value of 35.5x 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