LSTR
Landstar System, Inc.
$211.56
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.1% above fair value
You pay
$211.56
Bear
$111.26
Fair
$139.08
Bull
$166.90
Bear
$111.26
-47.4%
$7.36 × 12x P/E
Fair
$139.08
-34.3%
$7.36 × 15x P/E
Bull
$166.90
-21.1%
$7.36 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
28.7x
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 $206.00 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $139.08 per share.
Warnings
The company's reported profits differ from official accounting profits by 122%. Check what costs are being left out of the adjusted number.
The company pays out 97% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $54.29 (below our primary estimate by 51%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $206.00 (from 33 analysts). Our estimate is 46% below 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