GM
General Motors Company
$82.75
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 36.7% above fair value
You pay
$82.75
Bear
$44.59
Fair
$60.52
Bull
$76.44
Bear
$44.59
-46.1%
$6.37 × 7x
Fair
$60.52
-26.9%
$6.37 × 10x
Bull
$76.44
-7.6%
$6.37 × 12x
Adjust Assumptions
9.5x
6.37$
Key Value Driver
Through-cycle normalized EPS ($6.37)
Implied Market Multiple
13.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$102.33
Divergence from AlphaVal
41%
Summary
Using 7-year normalized EPS of $6.37 at a 10x cycle multiple, the base-case value is $60.52 per share. P/TBV cross-check: 1.3x.
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 $102.33 (from 51 analysts). Our estimate is 41% 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