KGSPY
Kingspan Group plc
$85.41
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 39.8% above fair value
You pay
$85.41
Bear
$44.79
Fair
$61.07
Bull
$77.36
Bear
$44.79
-47.6%
$4.07 × 14x + net cash
Fair
$61.07
-28.5%
$4.07 × 18x + net cash
Bull
$77.36
-9.4%
$4.07 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.07)
Implied Market Multiple
21.0x
Summary
Using 7-year normalized EPS of $4.07 at a 18x cycle multiple, the base-case value is $61.07 per share. P/TBV cross-check: 18.7x.
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 18.7x 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 1.1633 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