LSTR
Landstar System, Inc.
$194.01
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 51.0% above fair value
You pay
$194.01
Bear
$102.80
Fair
$128.50
Bull
$154.21
Bear
$102.80
-47.0%
$7.36 × 12x P/E
Fair
$128.50
-33.8%
$7.36 × 15x P/E
Bull
$154.21
-20.5%
$7.36 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
26.4x
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 $170.75 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $128.50 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 $170.75 (from 33 analysts). Our estimate is 35% 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