J
Jacobs Solutions Inc.
$114.69
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 13.7% above fair value
You pay
$114.69
Bear
$74.82
Fair
$100.86
Bull
$126.90
Bear
$74.82
-34.8%
$4.98 × 14x + net cash
Fair
$100.86
-12.1%
$4.98 × 18x + net cash
Bull
$126.90
+10.6%
$4.98 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.98)
Implied Market Multiple
23.0x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $156.17 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $100.86 per share.
Warnings
Wall Street's average price target is $156.17 (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