IFNNF
Infineon Technologies AG
$82.56
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 305.3% above fair value
You pay
$82.56
Bear
$14.14
Fair
$20.37
Bull
$26.61
Bear
$14.14
-82.9%
$1.56 × 12x + net cash
Fair
$20.37
-75.3%
$1.56 × 16x + net cash
Bull
$26.61
-67.8%
$1.56 × 20x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.56)
Implied Market Multiple
53.0x
Summary
Using 7-year normalized EPS of $1.56 at a 16x cycle multiple, the base-case value is $20.37 per share. P/TBV cross-check: 15.6x.
Warnings
Price-to-book value of 15.6x 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 1.1632 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