GFS
GLOBALFOUNDRIES Inc.
$47.70
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 87.5% above fair value
You pay
$47.70
Bear
$19.08
Fair
$25.44
Bull
$31.80
Bear
$19.08
-60.0%
$1.59 × 12x
Fair
$25.44
-46.7%
$1.59 × 16x
Bull
$31.80
-33.3%
$1.59 × 20x
Adjust Assumptions
16.0x
1.59$
Key Value Driver
Through-cycle normalized EPS ($1.59)
Implied Market Multiple
30.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$79.69
Divergence from AlphaVal
68%
Summary
Using 7-year normalized EPS of $1.59 at a 16x cycle multiple, the base-case value is $25.44 per share. P/TBV cross-check: 2.5x.
Warnings
Price-to-book value of 2.5x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $79.69 (from 19 analysts). Our estimate is 68% below the consensus -- consider that gap carefully.
This stock is 48% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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