MOS
The Mosaic Company
$22.54
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 5.7% below fair value
You pay
$22.54
Bear
$14.71
Fair
$23.91
Bull
$33.10
Bear
$14.71
-34.7%
$3.50 × 7x + net cash
Fair
$23.91
+6.1%
$3.50 × 10x + net cash
Bull
$33.10
+46.8%
$3.50 × 12x + net cash
Key Value Driver
Through-cycle normalized EPS ($3.50)
Implied Market Multiple
6.4x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $26.60 from 49 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $23.91 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.
Price-to-book value of 0.6x is below the typical low point. This could be a bargain, but check whether asset write-downs are coming.
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