F
Ford Motor Company
$12.72
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 24.0% above fair value
You pay
$12.72
Bear
$7.56
Fair
$10.26
Bull
$12.96
Bear
$7.56
-40.6%
$1.08 × 7x
Fair
$10.26
-19.4%
$1.08 × 10x
Bull
$12.96
+1.8%
$1.08 × 12x
Adjust Assumptions
9.5x
1.08$
Key Value Driver
Through-cycle normalized EPS ($1.08)
Implied Market Multiple
11.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (47 analysts)
$16.38
Divergence from AlphaVal
37%
Summary
Using 7-year normalized EPS of $1.08 at a 10x cycle multiple, the base-case value is $10.26 per share. P/TBV cross-check: 1.4x.
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 37% 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