PHM
PulteGroup, Inc.
$118.81
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 40.6% below fair value
You pay
$118.81
Bear
$155.68
Fair
$200.16
Bull
$244.64
Bear
$155.68
+31.0%
$11.12 × 14x
Fair
$200.16
+68.5%
$11.12 × 18x
Bull
$244.64
+105.9%
$11.12 × 22x
Adjust Assumptions
18.0x
11.12$
Key Value Driver
Through-cycle normalized EPS ($11.12)
Implied Market Multiple
10.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (44 analysts)
$143.86
Divergence from AlphaVal
39%
Summary
Using 7-year normalized EPS of $11.12 at a 18x cycle multiple, the base-case value is $200.16 per share. P/TBV cross-check: 1.8x.
Warnings
Wall Street's average price target is $143.86 (from 44 analysts). Our estimate is 39% 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