F
Ford Motor Company
$14.02
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 29.3% above fair value
You pay
$14.02
Bear
$6.67
Fair
$10.84
Bull
$15.01
Bear
$6.67
-52.4%
$1.30 × 7x + net cash
Fair
$10.84
-22.7%
$1.30 × 10x + net cash
Bull
$15.01
+7.1%
$1.30 × 12x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.30)
Implied Market Multiple
10.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $16.38 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $10.84 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 $16.38 (from 47 analysts). Our estimate is 48% 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