J
Jacobs Solutions Inc.
$125.83
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 24.8% above fair value
You pay
$125.83
Bear
$74.81
Fair
$100.84
Bull
$126.88
Bear
$74.81
-40.5%
$4.98 × 14x + net cash
Fair
$100.84
-19.9%
$4.98 × 18x + net cash
Bull
$126.88
+0.8%
$4.98 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.98)
Implied Market Multiple
25.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $156.13 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $100.84 per share.
Warnings
Wall Street's average price target is $156.13 (from 38 analysts). Our estimate is 51% 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