MOS
The Mosaic Company
$18.74
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 43.6% below fair value
You pay
$18.74
Bear
$24.50
Fair
$33.25
Bull
$42.00
Bear
$24.50
+30.7%
$3.50 × 7x
Fair
$33.25
+77.4%
$3.50 × 10x
Bull
$42.00
+124.1%
$3.50 × 12x
Adjust Assumptions
9.5x
3.5$
Key Value Driver
Through-cycle normalized EPS ($3.50)
Implied Market Multiple
5.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (49 analysts)
$26.30
Divergence from AlphaVal
26%
Summary
Using 7-year normalized EPS of $3.50 at a 10x cycle multiple, the base-case value is $33.25 per share. P/TBV cross-check: 0.5x.
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 0.5x is below the typical low point. This could be a bargain, but check whether asset write-downs are coming.
Wall Street's average price target is $26.30 (from 49 analysts). Our estimate is 26% above the consensus -- consider that gap carefully.
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