CTVA
Corteva, Inc.
$87.86
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 485.3% above fair value
You pay
$87.86
Bear
$11.06
Fair
$15.01
Bull
$18.96
Bear
$11.06
-87.4%
$1.58 × 7x
Fair
$15.01
-82.9%
$1.58 × 10x
Bull
$18.96
-78.4%
$1.58 × 12x
Adjust Assumptions
9.5x
1.58$
Key Value Driver
Through-cycle normalized EPS ($1.58)
Implied Market Multiple
55.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$95.38
Divergence from AlphaVal
84%
Summary
Using 7-year normalized EPS of $1.58 at a 10x cycle multiple, the base-case value is $15.01 per share. P/TBV cross-check: 10.9x.
Warnings
Price-to-book value of 10.9x 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 $95.38 (from 37 analysts). Our estimate is 84% 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