IFNNF
Infineon Technologies AG
$72.13
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 262.2% above fair value
You pay
$72.13
Bear
$13.82
Fair
$19.91
Bull
$26.01
Bear
$13.82
-80.8%
$1.52 × 12x + net cash
Fair
$19.91
-72.4%
$1.52 × 16x + net cash
Bull
$26.01
-63.9%
$1.52 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.52)
Implied Market Multiple
47.3x
Summary
Using 7-year normalized EPS of $1.52 at a 16x cycle multiple, the base-case value is $19.91 per share. P/TBV cross-check: 13.9x.
Warnings
Price-to-book value of 13.9x 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 1.1371 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