MAS
Masco Corporation
$68.23
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 0.8% above fair value
You pay
$68.23
Bear
$52.64
Fair
$67.68
Bull
$82.72
Bear
$52.64
-22.9%
$3.76 × 14x
Fair
$67.68
-0.8%
$3.76 × 18x
Bull
$82.72
+21.2%
$3.76 × 22x
Adjust Assumptions
18.0x
3.76$
Key Value Driver
Through-cycle normalized EPS ($3.76)
Implied Market Multiple
18.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$82.40
Divergence from AlphaVal
18%
Summary
Using 7-year normalized EPS of $3.76 at a 18x cycle multiple, the base-case value is $67.68 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
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