ORLY
O'Reilly Automotive, Inc.
$91.74
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 34.8% above fair value
You pay
$91.74
Bear
$59.54
Fair
$68.05
Bull
$76.55
Bear
$59.54
-35.1%
$2.98 × 15x P/E
Fair
$68.05
-25.8%
$2.98 × 17x P/E
Bull
$76.55
-16.6%
$2.98 × 19x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
30.8x
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 $110.64 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $68.05 per share.
Warnings
Wall Street's average price target is $110.64 (from 47 analysts). Our estimate is 55% 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