ORLY
O'Reilly Automotive, Inc.
$86.53
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 27.4% above fair value
You pay
$86.53
Bear
$59.41
Fair
$67.91
Bull
$76.39
Bear
$59.41
-31.3%
$2.98 × 15x P/E
Fair
$67.91
-21.5%
$2.98 × 17x P/E
Bull
$76.39
-11.7%
$2.98 × 19x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
29.1x
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 $110.15 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $67.91 per share.
Warnings
Wall Street's average price target is $110.15 (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