F
Ford Motor Company
$14.26
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 37.3% above fair value
You pay
$14.26
Bear
$6.40
Fair
$10.39
Bull
$14.39
Bear
$6.40
-55.1%
$1.30 × 7x + net cash
Fair
$10.39
-27.2%
$1.30 × 10x + net cash
Bull
$14.39
+0.9%
$1.30 × 12x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.30)
Implied Market Multiple
11.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $14.88 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $10.39 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 $14.88 (from 46 analysts). Our estimate is 43% 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