ODFL
Old Dominion Freight Line, Inc.
$221.04
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 156.2% above fair value
You pay
$221.04
Bear
$62.67
Fair
$86.28
Bull
$109.89
Bear
$62.67
-71.6%
$5.48 × 4x + net cash
Fair
$86.28
-61.0%
$5.48 × 6x + net cash
Bull
$109.89
-50.3%
$5.48 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($5.48)
Implied Market Multiple
40.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $217.50 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $86.28 per share.
Warnings
Price-to-book value of 10.7x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $217.50 (from 36 analysts). Our estimate is 86% below 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