LKQ
LKQ Corporation
$26.12
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 66.1% below fair value
You pay
$26.12
Bear
$65.11
Fair
$76.95
Bull
$88.78
Bear
$65.11
+149.3%
$3.51 × 22x P/E
Fair
$76.95
+194.6%
$3.51 × 26x P/E
Bull
$88.78
+239.9%
$3.51 × 30x P/E
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
7.4x
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 $34.00 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $76.95 per share.
Warnings
The company's reported profits differ from official accounting profits by 49%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $34.00 (from 22 analysts). Our estimate is 168% 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