GFF
Griffon Corporation
$90.83
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 263.0% above fair value
You pay
$90.83
Bear
$19.46
Fair
$25.02
Bull
$30.58
Bear
$19.46
-78.6%
$1.39 × 14x
Fair
$25.02
-72.5%
$1.39 × 18x
Bull
$30.58
-66.3%
$1.39 × 22x
Adjust Assumptions
18.0x
1.39$
Key Value Driver
Through-cycle normalized EPS ($1.39)
Implied Market Multiple
65.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$122.50
Divergence from AlphaVal
80%
Summary
Using 7-year normalized EPS of $1.39 at a 18x cycle multiple, the base-case value is $25.02 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 $122.50 (from 7 analysts). Our estimate is 80% 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