IFNNF
Infineon Technologies AG
$65.30
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 227.5% above fair value
You pay
$65.30
Bear
$13.83
Fair
$19.94
Bull
$26.04
Bear
$13.83
-78.8%
$1.53 × 12x + net cash
Fair
$19.94
-69.5%
$1.53 × 16x + net cash
Bull
$26.04
-60.1%
$1.53 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.53)
Implied Market Multiple
42.8x
Summary
Using 7-year normalized EPS of $1.53 at a 16x cycle multiple, the base-case value is $19.94 per share. P/TBV cross-check: 12.6x.
Warnings
Price-to-book value of 12.6x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Financial statements were converted from EUR into USD using EURUSD at 1.1384 USD per EUR.
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