MNRO
Monro, Inc.
$16.75
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 41.4% below fair value
You pay
$16.75
Bear
$25.00
Fair
$28.58
Bull
$32.14
Bear
$25.00
+49.3%
$1.55 × 14x P/E
Fair
$28.58
+70.6%
$1.55 × 16x P/E
Bull
$32.14
+91.9%
$1.55 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
10.8x
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 $40.00 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $28.58 per share.
Warnings
Dividend-based valuation: $18.67 (below our primary estimate by 25%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $40.00 (from 24 analysts). Our estimate is 38% 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