FBIN
Fortune Brands Innovations, Inc.
$37.65
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 33.0% below fair value
You pay
$37.65
Bear
$41.24
Fair
$56.23
Bull
$71.22
Bear
$41.24
+9.5%
$3.83 × 14x + net cash
Fair
$56.23
+49.3%
$3.83 × 18x + net cash
Bull
$71.22
+89.2%
$3.83 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($3.83)
Implied Market Multiple
9.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $52.57 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $56.23 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.
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