LEA
Lear Corporation
$139.80
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 26.9% below fair value
You pay
$139.80
Bear
$161.90
Fair
$191.34
Bull
$220.77
Bear
$161.90
+15.8%
$8.32 × 22x P/E
Fair
$191.34
+36.9%
$8.32 × 26x P/E
Bull
$220.77
+57.9%
$8.32 × 30x P/E
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
16.8x
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 $133.00 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $191.34 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 $133.00 (from 31 analysts). Our estimate is 63% 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