CMCO
Columbus McKinnon Corporation
$14.79
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 51.4% below fair value
You pay
$14.79
Bear
$24.65
Fair
$30.45
Bull
$36.25
Bear
$24.65
+66.7%
$1.61 × 20x + net cash
Fair
$30.45
+105.9%
$1.61 × 24x + net cash
Bull
$36.25
+145.1%
$1.61 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.61)
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 $17.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $30.45 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.
Wall Street's average price target is $17.00 (from 11 analysts). Our estimate is 99% above 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