IFNNY
Infineon Technologies AG
$54.32
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 202.4% above fair value
You pay
$54.32
Bear
$13.47
Fair
$17.96
Bull
$22.45
Bear
$13.47
-75.2%
$1.12 × 12x
Fair
$17.96
-66.9%
$1.12 × 16x
Bull
$22.45
-58.7%
$1.12 × 20x
Adjust Assumptions
16.0x
1.12$
Key Value Driver
Through-cycle normalized EPS ($1.12)
Implied Market Multiple
48.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$43.50
Divergence from AlphaVal
59%
Summary
Using 7-year normalized EPS of $1.12 at a 16x cycle multiple, the base-case value is $17.96 per share. P/TBV cross-check: 10.6x.
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.
Price-to-book value of 10.6x 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 $43.50 (from 7 analysts). Our estimate is 59% below the consensus -- consider that gap carefully.
Financial statements were converted from EUR into USD using EURUSD at 1.1204 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