LNN
Lindsay Corporation
$109.19
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 26.4% below fair value
You pay
$109.19
Bear
$125.37
Fair
$148.36
Bull
$171.35
Bear
$125.37
+14.8%
$6.01 × 20x + net cash
Fair
$148.36
+35.9%
$6.01 × 24x + net cash
Bull
$171.35
+56.9%
$6.01 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($6.01)
Implied Market Multiple
18.2x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $128.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $148.36 per share.
Warnings
Price-to-book value of 2.7x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
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