EXP
Eagle Materials Inc.
$170.01
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 28.0% below fair value
You pay
$170.01
Bear
$183.68
Fair
$236.16
Bull
$288.64
Bear
$183.68
+8.0%
$13.12 × 14x
Fair
$236.16
+38.9%
$13.12 × 18x
Bull
$288.64
+69.8%
$13.12 × 22x
Adjust Assumptions
18.0x
13.12$
Key Value Driver
Through-cycle normalized EPS ($13.12)
Implied Market Multiple
13.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$195.50
Divergence from AlphaVal
21%
Summary
Using 7-year normalized EPS of $13.12 at a 18x cycle multiple, the base-case value is $236.16 per share. P/TBV cross-check: 5.9x.
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.
Price-to-book value of 5.9x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
This company has heavy ongoing investment costs. Valuation shortcuts that ignore those costs can make the stock look cheaper than it really is.
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