LKQ
LKQ Corporation
$25.33
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 72.2% below fair value
You pay
$25.33
Bear
$77.22
Fair
$91.26
Bull
$105.30
Bear
$77.22
+204.9%
$3.51 × 22x P/E
Fair
$91.26
+260.3%
$3.51 × 26x P/E
Bull
$105.30
+315.7%
$3.51 × 30x P/E
Adjust Assumptions
26.0x
3.51$
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
7.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$31.30
Divergence from AlphaVal
192%
Summary
Applying a 26x P/E to adjusted EPS of $3.51, the base-case value is $91.26 per share. DDM cross-check: $29.04.
Warnings
The company's reported profits differ from official accounting profits by 49%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $29.04 (below our primary estimate by 68%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $31.30 (from 22 analysts). Our estimate is 192% 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