CMCO
Columbus McKinnon Corporation
$14.94
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 51.9% below fair value
You pay
$14.94
Bear
$25.13
Fair
$31.05
Bull
$36.96
Bear
$25.13
+68.2%
$1.61 × 20x + net cash
Fair
$31.05
+107.8%
$1.61 × 24x + net cash
Bull
$36.96
+147.4%
$1.61 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.61)
Implied Market Multiple
9.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $20.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.05 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 $20.00 (from 11 analysts). Our estimate is 69% 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