IPI
Intrepid Potash, Inc.
$31.37
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 288.5% above fair value
You pay
$31.37
Bear
$5.95
Fair
$8.07
Bull
$10.20
Bear
$5.95
-81.0%
$0.85 × 7x
Fair
$8.07
-74.3%
$0.85 × 10x
Bull
$10.20
-67.5%
$0.85 × 12x
Adjust Assumptions
9.5x
0.85$
Key Value Driver
Through-cycle normalized EPS ($0.85)
Implied Market Multiple
36.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (26 analysts)
$29.00
Divergence from AlphaVal
72%
Summary
Using 7-year normalized EPS of $0.85 at a 10x cycle multiple, the base-case value is $8.07 per share. P/TBV cross-check: 0.9x.
Warnings
Wall Street's average price target is $29.00 (from 26 analysts). Our estimate is 72% 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