LEA
Lear Corporation
$136.14
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 29.1% below fair value
You pay
$136.14
Bear
$162.56
Fair
$192.11
Bull
$221.66
Bear
$162.56
+19.4%
$8.32 × 22x P/E
Fair
$192.11
+41.1%
$8.32 × 26x P/E
Bull
$221.66
+62.8%
$8.32 × 30x P/E
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
16.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $135.57 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $192.11 per share.
Warnings
Dividend-based valuation: $51.02 (below our primary estimate by 76%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $135.57 (from 31 analysts). Our estimate is 60% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples